PRIVATE BUSINESS

Broads Authority Bill  (By Order)

Order for Second Reading read.
	 To be read a  S econd time on Wednesday 25 April at Four o'clock.

Oral Answers to Questions

SCOTLAND

The Secretary of State was asked—

International Development Fund

James Duddridge: What discussions he has had with the First Minister on the Scottish Executive's international development fund.

David Cairns: I have regular discussions with the First Minister on a range of subjects. In 2005 the First Minister, in agreement with my right hon. Friend the Secretary of State for International Development, launched a fund that will provide £12 million over four years to help improve health and education, particularly in Malawi.

James Duddridge: I thank the Minister for that reply. In the same year of 2005, the Government signed the Paris declaration, whose stated aim was to eliminate "duplication of efforts" and to rationalise
	"donor activity to make it as cost-effective as possible."
	Does the Minister agree that on both counts, the international development fund makes a mockery of the UK's commitment to the Paris declaration?

David Cairns: No, I do not. If the hon. Gentleman had listened to my answer, he would have heard me say that the First Minister was in agreement with the Secretary of State for International Development. Staff of the Department for International Development sit on the expert group that advises how the fund is used, and that group is working in harmony. We will take lectures on international development from many quarters, but not from the party that cut international development spending year on year.

Ann McKechin: May I draw to my hon. Friend's attention the fact that NHS Scotland is providing much expertise and training assistance to Malawi? When the International Development Committee visited last year, it was made clear that there was a real need to address the brain drain from that country, and its total lack of capacity. NHS Scotland and its partners in the rest of the UK are playing an important part in helping in that regard.

David Cairns: My hon. Friend speaks with great authority on the matter, as she is a member of the International Development Committee and has a connection with the all-party group on the great lakes region and genocide prevention. She is right to say that DFID and all the other agencies that we work with are operating in partnership in Malawi. DFID is recognised as being the gold standard when it comes to such work: that is why it is important, even though the fund being administered is small compared with the vast sums of money at DFID's disposal, to make sure that it does not suffer from duplication of effort. I am confident that it does not.

Pete Wishart: May I too urge the Minister to ignore anti-Scottish and anti-Malawian Tories, and to acknowledge Scotland's distinctive relationships and associations with sub-Saharan Africa? Has he seen the opinion poll carried out by the Scottish Catholic International Aid Fund, which shows that 76 per cent. of the Scottish people believe that decisions about Scotland's share of development funding should be made in Scotland?

David Cairns: The people of Scotland, through the country's membership of the UK, are making the most fantastic contribution to international development around the world. The policy of the hon. Gentleman's party is to break up the UK and take Scotland out of it, but that would do nothing to further the cause of international development. It is this Government—led, in this instance, by the Chancellor of the Exchequer's international leadership—who have led the way in cutting debt and helping the most heavily indebted poor countries. At Gleneagles, we brought together leaders from all over the world to set up an international finance facility. Scots should be proud of the role that Scots in the UK play to help the poorest in the world.

Digital Switchover

Robert Smith: What recent discussions he has had with the chief executive of Digital UK on digital switchover in Scotland.

David Cairns: Most recently, I met the chief executive of Digital UK on 22 November 2006.

Robert Smith: The Minister will be aware that people in vast areas of rural Scotland will not be able to receive through their aerials the full range of digital services that are available to the rest of the country. What action will he take to ensure that rural Scotland does not receive a second-tier service for digital terrestrial television?

David Cairns: The hon. Gentleman raises an important matter that I have acknowledged previously from the Dispatch Box. Essentially, this is a matter of engineering. The full suite of programmes can be broadcast from the main transmission masts, but that cannot happen from the relay transmitters because the signal is weaker. That is where the two-tier element comes in. On Thursday, I am due to meet Vicki Nash of Ofcom Scotland at the organisation's office in Glasgow. I assure the hon. Gentleman that I will raise the matter with her, and that I will get back to him.

Michael Moore: I assure the Minister that that issue was raised at the borders digital forum last week—but may I draw his attention to another issue? Digital TV providers are rightly promoting early adoption of the technology required for digital switchover, which means that older people and people in vulnerable groups are already converting their sets ahead of the availability of the financial assistance scheme later in the year. Will he explain why his colleagues in the Department for Culture, Media and Sport do not support the provision of retrospective support for those who convert now and would otherwise have been entitled to that financial assistance?

David Cairns: The whole point about assistance is to help those who are experiencing difficulties converting. Obviously, if people have converted they might not have been eligible for that assistance—and the hon. Gentleman knows that there is always a problem with retrospective payments in such cases. However, I hope that he will be reassured to learn that I will add that particular point to the ever-growing agenda for my meeting with Vicki Nash on Thursday.

Taxation

John Robertson: What discussions he has had on the effects of levels of taxation on Scotland.

Douglas Alexander: I hold regular discussions with Cabinet colleagues and members of the business community on a range of matters, including fiscal matters. As part of the United Kingdom, Scotland continues to benefit from this Government's management of the economy, which has delivered stability, low inflation, low interest rates and high employment.

John Robertson: Does my right hon. Friend agree with Sir Peter Burt of the Burt commission that replacing council tax with a local income tax would be impractical, and that setting up a nationally set tax would cost the Executive £19 million and employers £60 million, and that it would have annual running costs as high as £55 million? If so, will he ensure that such a rise does not happen for Scotland or the Scottish people?

Douglas Alexander: Sir Peter Burt makes a powerful case. It would be very difficult for people to explain, whether at Westminster or from Holyrood, why it would be in Scotland's interest to become the highest taxed part of the United Kingdom. A recent success of devolved government is the reversal of the brain drain and an historic turnaround in the demographic challenge that we faced in Scotland. It is for others who want to make Scotland the highest taxed part of the United Kingdom to try to make sense of that policy, in the context of the real successes that are being enjoyed at the moment.

Alex Salmond: Given that the great Budget "tax cut" con trick has been well and truly exposed, the Red Book shows that oil revenues are rising, not falling as claimed by the Chancellor, and the Labour party has committed itself not just to keeping but to revaluing the hated council tax, causing misery to hundreds of thousands of Scottish families, is it any wonder that Cabinet Ministers cannot even remember the name of the First Minister, and that the First Minister has taken to calling the Secretary of State rude names in French? Who is responsible —[ Interruption. ]

Mr. Speaker: Order. The hon. Gentleman must take his seat. I do not see what the First Minister has to do with his question. It should be a bit more specific, and he must keep it tight. Just a few more words—nothing more.

Alex Salmond: Who is responsible for the taxation position, and the shambles and negativity in the Labour Cabinet— [ Interruption. ]

Mr. Speaker: Order.

Douglas Alexander: The second intervention was no more worthy of the hon. Gentleman than the first, Mr. Speaker. As for tax con tricks, I am concerned about the suggestion by the Scottish National party that a 3p rise in income tax would be adequate to cover the large financial hole in its income tax proposals. The fact is that it is not the Government's policy to saddle every Scottish family with an additional tax bill of £5,000. It is not our policy to make the Scottish part of the United Kingdom the highest taxed part of the UK; that is the policy of the SNP.

Mark Lazarowicz: My right hon. Friend will be aware that the consequences of 6p on income tax would be particularly severe in areas where incomes are higher than the Scottish average. Will he consider making an assessment of the impact of local income tax on different parts of Scotland so that we can see the full damage for ourselves?

Douglas Alexander: My hon. Friend makes an important point. It is the SNP whose sums do not add up, not the Government's figures. I would simply say that the dividing line is now clearer than ever: it is a 2p cut in the basic rate with the Government, or a 3p—or, indeed, 6p—rise with the Scottish National party.

Jo Swinson: One in five Scots will be hit by tax rises under the Chancellor's latest Budget—that is 1 million Scots who are already on low incomes. He has proposed increased tax credits to compensate, but take-up among some groups is as low as 20 per cent. How can the Government pretend to create a fairer tax system when the reality is that the Chancellor is acting like Robin Hood in reverse?

Douglas Alexander: With respect, in the middle of a debate about figures adding up, I am not sure that the Liberal Democrats are the most authoritative source. If the hon. Lady seriously wishes to address the issue of child poverty, she will welcome the child benefit rise to £20 a week. Child benefit was £575 a year in 1997, but by 2010 it will be more than £1,000. Before asking her next question, perhaps she should look at the Institute of Fiscal Studies report on the Budget, which stated that when those changes in the tax system and the tax credits system are taken into account, the poorest 20 per cent. will benefit most from the Budget.

David Marshall: Does my right hon. Friend agree that quite apart from the substantial damage that would be done to the people of Scotland by any proposal to increase income tax by 3p, or to introduce a local income tax, such measures are totally unworkable except at tremendous cost? Does he further agree that they would also require the agreement of the Westminster Departments that would have to collect any such taxes?

Douglas Alexander: Of course, some people advocate a position called fiscal autonomy. For example, Crawford Beveridge argues that there should be a shift in the tax powers. Indeed that individual has been quoted a number of times by several Members, so it would be helpful for people to understand the consequences of such a change. On 29 October, Crawford Beveridge stated:
	"I advocate the policy that Scotland should raise the money it spends. I know that could potentially plunge the place into recession, because it is unlikely that the total tax take would be as much as Scotland currently receives under the Barnett formula."
	With friends like that, no wonder those people cannot make their figures add up.

David Mundell: Although I might agree with the Secretary of State about the disastrous impact that the SNP's 3p tax rise might have, did he really think that anyone in Scotland would not see through a Budget that gave with one hand and took with the other? What does he have to say to people about that?

Douglas Alexander: First, may I say what a pleasure it is to welcome the hon. Gentleman to the House—not least because when he has important contributions to make to public debate in Scotland, he is so often busy with constituency events? None the less, the statement he has just offered us evidences the point that he made in his previous work as an MSP, when he stated that there was a "simple lack of thinkers" on the Scottish Conservative Benches.
	On the hon. Gentleman's substantive point about the changes in both income tax and corporation tax, I would have hoped that he would welcome the cut in corporation tax and the cut in the basic rate of income tax. If, as part of the new modern Conservative party, he is seriously concerned with the distributional effects, I again refer him to the Institute for Fiscal Studies, which said that the poorest 20 per cent. would benefit most from the Budget.

David Mundell: At least I know the names of my colleagues in Scotland. The Secretary of State is as complacent about poverty in Scotland as he appears to be about the Scottish election campaign, which he is allegedly running. Is he aware that figures released today by the Department for Work and Pensions show that child poverty is increasing, inequality is rising, and the incomes of the poorest fifth are in decline? Is it any wonder that the people of Scotland are so determined to get rid of Labour in May?

Douglas Alexander: The reason why the hon. Gentleman knows the names of his colleagues is that they are all calling for his resignation. Frankly, with a question like that, is it any wonder that he is the only person in history—as far as I am aware—to be rejected as a parliamentary candidate by the Liberal Democrats? The fact is that over the past 10 years child poverty has fallen more rapidly in the United Kingdom than anywhere else in Europe, and child poverty is falling more rapidly in Scotland than in any other part of the UK. Of course there is work to be done, but the party that can be trusted to take it forward is Labour, not the Opposition.

Brian H Donohoe: Does my right hon. Friend agree that when we are trying to attract new talent to Scotland because of skills shortages, to have the highest taxation in the UK would not be appropriate?

Douglas Alexander: Yes. Perhaps unusually, I find myself in complete agreement with my hon. Friend.

Ferry Services

Alan Reid: What recent discussions he has had with the European Commission on the effects of the European maritime cabotage regulations on Scottish ferry services.

David Cairns: Ferry services within Scotland are a matter for the Scottish Executive. The UK Government supported the Executive in making representations to the European Commission on matters relating to ferry services in Scotland, securing a number of important concessions.

Alan Reid: The European rules on subsidised ferry services in Scotland are clearly a piece of useless bureaucratic nonsense. They have already forced the Scottish Executive to waste more than £15 million on a pointless tender exercise, and are putting at risk the future of vehicle-carrying services between Dunoon and Gourock. Will the Secretary of State, who represents the UK on the European Transport Council, go to Brussels, tell the Transport Ministers what nonsense the rules are, and get them altered before the Scottish taxpayer is forced to waste even more money, and vehicle-carrying services between Dunoon and Gourock are brought to an end?

David Cairns: May I begin by declaring that the headquarters of CalMac are in my constituency? That allows me to say that I am aware of the concerns over this protracted tendering exercise, which is, as I have said, a matter for the Scottish Executive. Both the Executive and the UK Government agreed that we had to go through the tendering process, although it has led to some slightly ill-informed speculation, and comparisons with the Paris Metro. There is a different regulatory regime for the Metro system and the maritime system—and as far as I am aware, there are no boats on the Paris Metro. People who want to make that comparison should think twice before doing so.

Katy Clark: My hon. Friend is aware that I have the island communities of Arran and Cumbrae within my constituency. Has he given consideration to what more can be done to make the lifeline ferry services in Scotland affordable for Scotland's island communities?

David Cairns: Yes. I know those communities very well indeed, and I was pleased to be in Stornoway two weeks ago with the First Minister when he announced that, if he is re-elected as First Minister, there will be a ferry discount commitment. [Hon. Members: "What's his name?"] I understand why Opposition Members do not want to hear about the ferry discount scheme that will benefit the lifeline communities in the islands in the west of Scotland, but they will have to. If re-elected, we are going to introduce a scheme that will give a 40 per cent. discount to inhabitants of the islands—not just the Clyde islands such as Arran and Cumbrae, but the western islands. The move to introduce that important ferry subsidy is due to the intense lobbying and great activity of Alasdair Morrison, the Member of the Scottish Parliament for the Western Isles, who, more than anyone else, has helped to bring this scheme about. Great tribute is due to him.

Angus MacNeil: Can the Minister properly explain why £15 million was wasted in the CalMac tendering? Was it because Scottish Executive Liberal Ministers did not get on with the Department for Transport? Yesterday we saw the reality of Labour's own co-operation between Westminster and Holyrood, when the Health Secretary did not know the First Minister's name. Some £15 million has been wasted—enough for three years of free travel to my constituency, and especially Stornoway. My constituents have been kept on tenterhooks. CalMac crews have not known is going on. Would it not have been much better for Scotland to have dealt directly with Europe on this matter, rather than involving imperialist Whitehall Departments—not least, to save money?

David Cairns: It is absolutely astonishing that when we are discussing a 40 per cent. ferry discount proposal that will benefit the hon. Gentleman's constituents, he does not even have the grace to welcome that announcement or say that he is going to support it. That is because he did nothing whatever to bring the announcement about. That stands in sharp contrast to Alasdair Morrison, the Labour MSP, who worked tirelessly on behalf of his constituents and who has secured this great victory for them.

Ian Davidson: Is the Minister aware—

Mr. Speaker: Order. Why not say, "No. 5"? That gets us started.

Unemployment

Ian Davidson: If he will make a statement on recent changes in unemployment levels in Scotland.

Douglas Alexander: It is almost as if my hon. Friend had prepared his supplementary question in advance, Mr. Speaker.
	The stability generated by this Government's management of the economy has delivered the strongest labour market in decades. Scotland has a higher employment rate than the rest of the United Kingdom and nearly all other countries in Europe. There is, of course, no room for complacency. Last week's Budget shows that work continues towards the long-term goal of employment opportunity for all.

Ian Davidson: I apologise, Mr. Speaker. These events are just so exciting that I got carried away.
	Does the Minister agree that under the benevolent guidance of the comrade Chancellor, unemployment in my constituency has fallen by over 50 per cent. in the last 10 years, youth unemployment is down by over 80 per cent. and long-term unemployment is down by over 90 per cent.? Is he aware that the major employers in my area are the National Savings bank at Cowglen and the Govan shipyards, both of which depend on customers in England and the rest of the United Kingdom for the vast bulk of their business? Is he aware that if bad people wrench the United Kingdom apart, there will be enormous unemployment in my area?

Douglas Alexander: I certainly am aware of the final point that my hon. Friend makes. I have campaigned on the issue of National Savings in Cowglen and on BAE Systems and the Govan yard and the Scotstoun yard, along with him. Independent research published by the Fraser of Allander Institute on 19 March concluded that the Clyde yards contribute more than £238 million to the Scottish economy and support almost 4,500 jobs across Scotland. The fact is that those yards—and the tradition of shipbuilding on the Clyde—have been sustained because of naval orders placed by the British Government. I leave it to the electors of my hon. Friend's constituency and across the west of Scotland to reach a judgment on whether, if there were not a United Kingdom, they would see those United Kingdom orders coming to the Clyde.

John Thurso: Is the Secretary of State aware of the impact on unemployment of Ministers' decisions, especially regarding the loss of jobs in the Department for Work and Pensions and Her Majesty's Revenue and Customs because of relocation away from such current offices as Wick? Will he ensure that when Ministers take such decisions, they understand their impact on remote regions?

Douglas Alexander: Of course, I am happy to examine the specific point that is of direct constituency interest to the hon. Gentleman. However, I can assure him that the DWP and other Departments are in the process of increasing the computerisation of systems that are inevitably and appropriately being upgraded in the light of continuing customer demand.

Rosemary McKenna: Would my right hon. Friend care to comment on, or respond to, the fact that HMRC employs 1,000-plus people in my constituency, which has a good employment record? What would happen in the event of Scotland being ripped away from the rest of the UK?

Douglas Alexander: My hon. Friend is entirely right to recognise the risks that would be caused to jobs coming through the DWP, Customs and Excise and other Government agencies that employ people in the United Kingdom. Both the public and private sectors have made a contribution to the uplift in employment that we have seen in recent years. While, of course, we have seen more doctors, nurses and teachers, the private sector too is growing. That is why I welcome the recent statement by Andrew McLaughlin, the Royal Bank of Scotland Group's chief economist, in which he said:
	"Growth in private sector job creation hit a new high in February."

Stewart Hosie: The Secretary of State will be aware of the support employment projects run at Falkirk football club and at Dens and Tannadice in Dundee, which take small groups of people and build them up with confidence, motivation skills and the soft skills that employers need. He might also be aware of the community project in Leith called Working Rite, which takes young unemployed people and gives them, pre-apprenticeship, one-to-one mentoring with journeymen and experienced tradesmen. All those projects have a massive success rate, so does the Secretary of State agree that for that group of people, who have traditionally found it hard to get into employment, such a one-to-one, soft-skill, motivation, mentoring and coaching process might be more applicable than the traditional one-size-fits-all approach on finding employment that Governments have historically taken?

Douglas Alexander: Of course, the challenge that we face on worklessness has evolved. When we were first elected in 1997, there were many people who had found themselves unemployed as a consequence of two recessions in as many decades. Now we are addressing people with specific needs, such as those who are not job-ready because of numeracy or literacy problems, or drug dependency. That is why it is important that a range of providers is working to offer the necessary assistance. In my constituency an organisation called Working Links is undertaking such work, and I welcome the progress that it has made.

David Mundell: Perhaps there is one matter on which the Secretary of State and I can agree: Scotland's place in the Union has contributed greatly to employment levels in Scotland over the years. The commitment to the Union is absolute among Conservative Members, but does the Secretary of State really believe that bullying and scaremongering is the way to keep Scotland in the United Kingdom? Does he not agree that it is incumbent on all Unionists to make a positive case for the Union?

Douglas Alexander: I hope that there is common ground between us that the way not to make a case for the Union is to have a large group of students turning up with megaphones without batteries in them.

Inward Investment

Mohammad Sarwar: What recent estimate he has made of the level of inward investment in the Scottish economy; and if he will make a statement.

Douglas Alexander: There are no official estimates of the level of inward investment in Scotland, but the most recent data produced by the Organisation for Economic Co-operation and Development showed that the UK was the world's largest recipient of inward foreign direct investment in 2005, while Ernst and Young's inward investment monitor showed that Scotland attracted more of that inward investment than any other part of the UK, apart from the south-east of England.

Mohammad Sarwar: Does my right hon. Friend agree that the level of inward investment to which he referred is due to the United Kingdom's strong and stable economy? Does he further agree that on 3 May, if Scottish nationalists are given the chance to start divorce proceedings from the United Kingdoms, it will damage our—

Mr. Speaker: Order. That is out of order.

Douglas Alexander: I certainly agree that inward investment has a key role to play, and the competitiveness of the British economy and the Scottish economy is essential in attracting that inward investment. That is why I welcome the World Economic Forum's global competitiveness report of 2006, which ranked the UK 10th in its table of international business competitiveness. It is 11 places above Ireland, and it is above Norway, Iceland, Canada and France.

COMMUNITIES AND LOCAL GOVERNMENT

The Secretary of State was asked—

Affordable Housing (North Yorkshire)

Anne McIntosh: What assessment she has made of the affordability of housing in North Yorkshire.

Yvette Cooper: There have been significant increases in the number of home owners in North Yorkshire over the past 10 years. However, house prices have gone up, putting pressure on first-time buyers, and the number of homes being built in Yorkshire still falls short of the number of new households. That is why we are increasing investment in affordable housing in Yorkshire—but we need to build more homes of all kinds.

Anne McIntosh: Does the Minister share my concern that not only is the average cost of housing in North Yorkshire, and Yorkshire and the Humber as a whole, higher than the average price in the rest of England, but average earnings are lower, so there is a double effect? In addition, the impact of council tax increases has been stark, and in 2005 some 10,500 affordable homes were lost through the right-to-buy scheme. What exactly are her Government doing to promote affordable housing in North Yorkshire?

Yvette Cooper: The hon. Lady will be aware that we put in place a series of safeguards on the right to buy—a policy that, as she knows, her party introduced. We are doubling investment in affordable housing in Yorkshire, but she, and councils across Yorkshire, need to realise that we need to build more homes. Local councils can themselves do more, for example through section 106 agreements, which still deliver only a small proportion of the affordable homes across North Yorkshire.

Hugh Bayley: House prices in York have increased faster than house prices across the country as a whole. They used to be lower than the average price nationally but now they are considerably higher, and young working couples are being priced out of their own city. York has built 600 homes under section 106 agreements, and could build more if it got more social housing subsidy from the Government. Will more Government subsidy be coming to York?

Yvette Cooper: My hon. Friend makes an important point. We need more affordable housing across Yorkshire. That is why we have already doubled investment in affordable housing in Yorkshire, as I said. We want to support the provision of more affordable homes through the spending review, but we think that local authorities need to do their bit. Certainly, across the northern regions fewer resources come from section 106 than in other areas, and we believe that by working alongside other programmes, we can do more to get those additional affordable homes.

Michael Gove: The Government are, crucially, responsible for key elements of housing supply in North Yorkshire and the wider Yorkshire and the Humber region. One respect in which Ministers are directly responsible for the area is through the millennium community scheme. Ten years ago, in 1997, the Government announced that they were creating seven new millennium villages. One of them, Allerton Bywater, is in Yorkshire. The scheme has so far cost a massive £131,565,732, but in Allerton only 44 houses have been built. Can Ministers explain why the scheme has been such an expensive failure? Where has all the money gone?

Yvette Cooper: I invite the hon. Gentleman to come to Allerton Bywater and see the huge progress that has been made in turning round a derelict pit site that needed considerable investment and remediation. That coalfield community had been abandoned by the Conservative Party for many years, but it is now receiving new investment in new facilities. There are major new programmes, in which homes are being built and new facilities provided for the local community, including community centres and new parks and spaces. He should come and see the impact of new investment, not only in Greenwich millennium village, but in Allerton Bywater millennium village and a series of villages across the country. He knows from reading the answers to his own parliamentary questions that he is utterly misrepresenting the figures. He should recognise the important benefits that are being created for communities, which he would be dishonest to ignore.

Inter-faith Forums

Sarah McCarthy-Fry: What steps her Department is taking to promote inter-faith forums as a means of tackling religious extremism.

Ruth Kelly: Inter-faith initiatives play a key role in tackling and isolating violent extremist activity. My Department supports the Inter Faith Network, which represents the collective voice of all main faith communities and helps regional and local bodies to contribute to community cohesion. The work of community groups is at the heart of our response to the challenge that we face from violent extremism.

Sarah McCarthy-Fry: I am aware of the good work done in Portsmouth with Portsmouth Interfaith Forum in building networks in hard to reach communities across the faiths, largely due to a full-time inter-faith co-ordinator. However, because of the vagaries of the faith communities capacity-building funding, what is funded in year 1 cannot be funded in year 2, so the work looks as though it may go to waste. Will my right hon. Friend agree to look into the matter for me?

Ruth Kelly: I congratulate my hon. Friend on the work that she is doing in championing the needs of her constituents. Clearly, I am not familiar with the particular programme that she mentions, although I am happy to look into that. She is right to draw attention to the work that inter-faith activity can do. The Department has invested £5 million this year, and the same last year, in that work. We are also working extremely closely with the Office of the Third Sector. In its review of voluntary sector activity, including faith communities, we are thinking about how we can ensure the sustainability of funding going forward, which I know is of huge interest to those involved in the field.

Ben Wallace: Has the Secretary of State filled the post of director general, equality, in her Department, a post that is supposed to be in charge of leading the tackling extremism together strategy? If she has, why did it take over a year and a half, and thousands of pounds worth of advertising, to fill that space?

Ruth Kelly: Yes, we have. The reason we went through a search process was because the community cohesion element of the work that was with the Home Office came to the new Department for Communities and Local Government. It is right that it has done so, because now we are able to think about equalities in the round, taking account of the views of faith groups as we take account of the views of other equalities groups. That give us a huge opportunity, going forward, to think through how we make this country and this society a fairer and better place for people to live. We have a candidate of fantastic calibre in that job to take that work forward.

Keith Vaz: I welcome all the good work that the Secretary of State and the Minister for Women and Equality are doing on the equality agenda. On inter-faith activity, does my right hon. Friend agree that getting young people together in those forums is particularly important? Bridging the divide at an early age is crucial to tackling it later. What does she see as the role of the new commission in trying to achieve her stated ambition to make sure that the work is continued?

Ruth Kelly: My right hon. Friend is right to say that involving young people in inter-faith work and in joint and shared activity is vital to our future. Evidence shows that young people are particularly prone to the messages from violent extremists. If we are to ensure that they have the defences that they need and that communities are resilient to the threat posed by violent extremists, we need to engage as many young people as possible. The new Commission for Equality and Human Rights, to which my right hon. Friend referred, will have a particular role in making sure that people of all ages and across all faiths are able to have their voices heard. In the Muslim community especially, and also at local authority level, we face a challenge as a Government to make sure that the voices of young people and women are heard in the debate—voices that have for too long been neglected.

Local Democracy

Peter Soulsby: What steps her Department is taking to encourage people to stand for election as councillors.

Phil Woolas: On 8 February, my right hon. Friend the Secretary of State announced the launch of an independent Commission on Local Councillors to consider the incentives and barriers to people serving as councillors and to make recommendations. The commission will consider a range of issues, including encouraging people who are able, qualified and representative to be candidates to serve as councillors. The commission is expected to report in the autumn.

Peter Soulsby: I welcome the Government's move to establish the commission. I am sure that my hon. Friend is aware of the national census of local authority councillors published recently by the Local Government Association and others, and is therefore also aware of the scale of the task faced by the commission. The census shows that at present councillors are far from fully representative of the communities they serve, that their average age is in the late 50s, and that all parties are struggling to attract and retain council candidates of calibre. Does my hon. Friend agree that that is a challenge for the Government, for local government and for all political parties if those of us who care about the future of local democracy are to see it flourish?

Phil Woolas: I agree with my hon. Friend, who served with distinction as leader of his city—one of the most diverse cities in our country—for, I believe, 18 years. He is right to draw this matter to our attention. I will not list the figures from the census, but Members will gather that the pattern across the country is that councillors are not as representative of communities as we would all like them to be—although I have to say that some parties start from a better base than others.

Bob Neill: Does the Minister agree that one of the biggest disincentives preventing people from becoming involved in local government is the feeling that their role makes no difference? Would not one of the best ways of making people feel they can make a difference as councillors be to give them back more control over local decision making and local spending, perhaps by supporting the Sustainable Communities Bill?

Phil Woolas: I congratulate the hon. Gentleman on the ingenuity of his question, which is linked to Question 19. It is for exactly that reason that our proposals in our White Paper and in our Bill will rightly give councillors more powers—particularly in their role as ward councillors, which involves the implementation of measures such as the community call for action.

Jeff Ennis: The Minister will know that the number of councillors aged 45 or less has halved in the past 20 years, from 26 per cent. in 1985 to a paltry 13.5 per cent. last year. Obviously, the introduction of education for citizenship as part of the national curriculum will help, but what other initiatives can we pursue to encourage more young people to become councillors?

Phil Woolas: I would not want to give my hon. Friend or, indeed, anyone else the impression that I was biased against people over 45—for obvious reasons—but his point is very important. Unless we can involve younger people in representing our communities, local government will not be as healthy as we would all like it to be. As well as the measures outlined in the announcement of the commission, the Government are taking a range of measures, particularly with the Department for Education and Skills, but also with other Departments, to pursue initiatives such as the Youth Parliament and other youth forums, all of which can help.

Alistair Burt: Should not the Minister acknowledge the role that his Government have played in discouraging councillors over the past 10 years? Is it not the case that too many councillors up and down the land have expressed their despair at the fact that, through their manic culture of targets, quotas and directives, the Government have completely distorted the relationship between national and local government?
	In 2005-06, 5,091 circulars and directives were delivered to councils from the Government—50 per working week. The Local Government and Public Involvement in Health Bill, with which we have dealt recently, offered the Minister more chances to be permissive to councils in terms of their leadership structure, limitations on targets and the forced abolition of patient forums, all of which he turned down. Is it not the case that those standing as councillors and wanting to be free of such wretched Government control still do so more in hope than in expectation?

Phil Woolas: I do not accept the picture that the hon. Gentleman paints. The comprehensive performance assessment has led to improvement in the quality of public services provided by local councils, but the new arrangements—part-heralded by the Bill on whose Committee the hon. Gentleman served—strip away many of those targets in the new regime and allow for the local decision making that we and the Local Government Association want.

Paddy Tipping: While high standards and probity are important in the lives of local authorities, does the Minister accept that some of the activities of the Standards Board work against councils? Are not the long delays, and the fact that the Standards Board does not tell councillors about an initial complaint, worth investigating?

Phil Woolas: It is because of such representations that changes have been made to the operation and logistics of the Standards Board and to the code of conduct upon which we consulted recently and which the Committee debated. I think that my hon. Friend will find the outcome to his satisfaction.

Sustainable Communities Bill

Gregory Barker: What plans she has to discuss the Sustainable Communities Bill with local government.

Phil Woolas: The Sustainable Communities Bill is, of course, a private Member's Bill. I understand that representatives of the Bill's supporters recently met the Local Government Association to discuss it, as I will shortly.

Gregory Barker: The Minister will be aware that more than 400 Members from both sides of the House, including not only the whole Conservative party but half the parliamentary Labour party, are supporting the Bill. Can he explain why the Secretary of State is the only Member to have refused to have local meetings in her constituency, having turned down a whole range of possible dates? Is not that very worrying? Can he give the House an absolute assurance that the Government will do nothing to block or impede the Bill when it returns to the House?

Phil Woolas: My right hon. Friend the Secretary of State has met the supporters of the Bill, as have I. Indeed, last night we had a very interesting and successful rally about the themes of the Bill in Central Hall, Westminster, at which the right hon. Member for Witney (Mr. Cameron) spoke. I was able to point out to him and to others that the Government are supportive of the goals of the Bill, as I told the House when it was debated. However, whatever its virtues, those who claim that it will solve every problem in their constituencies are sadly mistaken.

Alan Simpson: One of the great attractions of such legislation is that it would give local authorities in the UK the same powers and entitlements that they have in other parts of Europe—in France, Germany, Denmark, the Netherlands and Italy—including the right to set energy generating and water recycling standards so as to exceed national targets rather than follow them. Will the Minister look again at the proposals that are being made for policy planning guidelines to give UK local authorities the same across-the-board entitlements as their counterparts in Europe?

Phil Woolas: My hon. Friend will know that we have our goal of zero carbon homes. We will indeed be considering the points that he raises. Many of the measures already contained in legislation before the House move towards substantial powers being held locally, particularly through the local area agreement process. I am pleased to tell the House that by the end of this week every local authority in England will have a local area agreement.

Andrew Stunell: Given that the Prime Minister wrote to the Secretary of State on 9 May last year charging her with providing radical devolution to local communities, can the Minister explain why he has such a hang-up about the Sustainable Communities Bill, which would do precisely that? Can he now throw his weight, and get his Department to throw its weight, behind the Bill and set local authorities free to achieve what the Prime Minister wanted the Secretary of State to achieve?

Phil Woolas: The measures that the Government have brought before the House on sustainable communities strategies, local development frameworks, local area agreements and the new statutory framework move the relationship substantially from the centre to local areas. As regards the Sustainable Communities Bill, my colleagues and I will make it better and make it workable. I would have thought that that would be welcomed by Members, such as the hon. Gentleman, who are supporting it. It would not be right or responsible for a Government to agree to pass a Bill in the knowledge that their legal advisers and parliamentary counsel had pointed out deficiencies in it. That is why I am adopting the approach of tabling amendments, as the hon. Gentleman will know if he is following the debate.

David Drew: I congratulate my hon. Friend on what he said last night. Does he agree that the best way to scrutinise the Bill properly is to get it into Committee? There have been many negotiations behind the scenes and I greatly appreciate what my hon. Friend has done to make that happen. However, we need the Bill to come into Committee so that we can properly discuss how to move forward with that important measure.

Phil Woolas: My hon. Friend is right. Of course, the measure is a private Member's Bill and its promoter, the hon. Member for Ruislip-Northwood (Mr. Hurd), who cannot be here today, is entering into constructive discussions with the Department and me about the way in which we can ensure that its goals and objectives are met in a manner that improves existing legislation and the measure. However, the Bill is the property of the House.

Caroline Spelman: Last night, we all enjoyed the Minister's company before a rally of more than 1,000 people. However, the campaigners were disappointed to hear his view that the Sustainable Communities Bill is superfluous because its spirit and letter are covered by other Government measures. Where, in legislation, is the requirement to publish in full all the taxpayers' money spent in a locality and the discretion for local authorities to spend it as they see fit?

Phil Woolas: The hon. Lady does not accurately reflect my comments at the rally last night. I did not use the word "superfluous" and it is wrong to try to portray the Government's attitude in that way. It is also wrong to tell constituents and the public in general that passing the Bill, virtuous though it is, will stop every pub, shop and post office closing and bring nirvana to our constituencies. It will not. It is, frankly, misleading to suggest that. I agreed with one thing—I emphasise "one"—that the right hon. Member for Witney said, which is that it is no good people saying one thing and doing another. I would have thought that the party of the free market wanted a level playing field, not the use of planning laws for centralised control—

Mr. Speaker: Order.

High Hedges

Doug Naysmith: What guidance her Department gives to councils that impose charges to deal with complaints under the high hedges provisions contained in part 8 of the Anti-Social Behaviour Act 2003; and if she will make a statement.

Meg Munn: Our advice on fees under the high hedges legislation is in the guidance document "High Hedges Complaints: Prevention and Cure." It states that each local authority is responsible for deciding whether, and at what level, to charge for dealing with complaints about high hedges.

Doug Naysmith: I thank my hon. Friend for that reply. She knows that I have tried to highlight the unfairness associated with the policy for some time. I cannot understand why there should be any difference between investigating a planning violation or a noisy neighbours problem and a high hedges complaint. Yet action on one is free but action on other costs more than £600 in some local authorities. Some of my elderly constituents cannot afford the £320 that it costs in the Bristol area. I have been assured by some of my hon. Friend's predecessors that the matter is kept under constant review. Does she anticipate any results from that constant scrutiny?

Meg Munn: As my hon. Friend will remember, the subject of high hedges was tackled initially in a private Member's Bill and then taken up by the Government. Essentially, we enabled the existence of a system to deal with private matters, which concern only the individuals directly involved. That is different from antisocial behaviour such as noise nuisance. We have made it clear that local councils are in a position to determine what they should charge. If they so chose, they could charge less for people who are on low incomes or over a certain age.

Philip Hollobone: Has the Minister undertaken an estimate of the total amount of money raised through complaint charges since the Act came into force?

Meg Munn: No, we do not collect centrally the data on the operation of high hedges legislation, so that information is not available. To respond further to the question asked by my hon. Friend the Member for Bristol, North-West (Dr. Naysmith) about a review, we consider it too early to reach a conclusion on these matters. We are not receiving a great deal of complaints about how the 2003 Act is operating, so we do not believe that there are many problems with it. We will review it in due course, but not yet.

New Homes

Ian Austin: How many new homes she estimates are needed to meet current demand.

Yvette Cooper: The analysis in the Barker review showed that we should aim to deliver about 200,000 new homes a year to prevent future problems with affordability. The level of house building has increased from around 130,000 to 180,000, but we need to go further.

Ian Austin: My constituents want to know that they have a Government who are on their side, helping people who are working hard on limited incomes to get on in life. What more can the Government do to help people earning perhaps £10,000 or £12,000 a year who are keen to start a family, but want to wait until they have got on the housing ladder and can buy or rent a home of their own?

Yvette Cooper: We will be helping 160,000 families into shared ownership programmes by 2010, but, frankly, we also have to get serious about building more homes. My hon. Friend will know that there is continued opposition, including from the Opposition Benches, to building more houses. Early-day motion 519 of the last Session stated that the Government's housing proposals would
	"lead to unacceptable overdevelopment in Surrey and other parts of the South East".
	It was signed by the hon. Member for Surrey Heath (Michael Gove) and, frankly, that shows an irresponsible attitude towards the first-time buyers of the future.

Bob Russell: Will the Minister follow up her comment about irresponsible decisions by estimating how many of those new homes will be built on natural floodplains?

Yvette Cooper: The hon. Gentleman will know that housing developments around natural floodplains have been in place over our history. Many developments in the city of York and elsewhere are in natural floodplains, but he will also know that we have tightened the planning guidance in that area. In particular, we set out new planning policy guidance before Christmas in order to prevent inappropriate development in flood areas and ensure that homes are sustainable for the future.

David Wright: Do we not need to target more new housing specifically at young people, particularly those who are homeless, or about to be homeless? Will the Government develop a strategy to promote the building of foyer projects in each town throughout the country?

Yvette Cooper: My hon. Friend is right to highlight the good work that foyer projects do. We have set a target to end the use of bed and breakfast for young homeless people, as we think it inappropriate. Foyer schemes are one way of doing things, but there may be other ways of providing supported housing for young people in communities. My hon. Friend is right to say that it should be a priority. We have made great progress helping families out of homelessness and now we want to do more for young people.

Kelvin Hopkins: Thirty-three years ago, I was vice-chair of housing in Luton when we had a housing waiting list of 4,000 families. We simply built and bought thousands of homes and housed all on that waiting list. Our housing waiting list is even bigger now and the majority of people on it cannot contemplate home ownership, as it is simply beyond them. I suggest that my hon. Friend should look again at what we used to do in the '70s and perhaps replicate it now.

Yvette Cooper: My hon. Friend will know that the housing market has changed substantially since the 1970s, and that we now have far more home owners than we did then. He will also know that it is right to increase market housing, along with more shared ownership and social housing. I think that councils need to play a stronger role in that process as part of the investment in new housing for the next few years.

Landlords

David Taylor: What assessment she has made of the merits of further regulating landlords.

Stephen Hepburn: What steps she is taking to tackle unscrupulous landlords.

Ruth Kelly: The mandatory licensing of high-risk houses in multiple occupation and discretionary powers for local authorities to license other private rented accommodation were introduced in April 2006. From 6 April this year, we will introduce a scheme to protect tenancy deposits.

David Taylor: There has certainly been excellent short and medium-term progress at the bottom end of the market in the schemes for HMO licensing and tenancy deposit protection, but does the Secretary of State agree that we need some long-term reforms in this sector—either by licensing rented property or by encouraging landlords to sign up to minimum management standards, greater security of tenure and linking rent rises only to inflation? That would make private sector renting much more attractive and guarantee a lot more tenants decent homes. Does my right hon. Friend agree?

Ruth Kelly: I agree with the thrust of my hon. Friend's comments. We should have a dual approach. First, we should encourage minimum standards and the spread of good practice across the sector. We are doing that by supporting accreditation schemes, whereby local authorities work with landlords to drive up standards across the sector. Secondly, we should give local authorities the powers that they need where management and landlords are clearly failing in their duties. If we take that two-pronged approach, we will avoid a situation in which hundreds and thousands of tenants throughout the country face the consequences of extraordinarily poor management on occasion, and insecurity in their tenure as well.

Stephen Hepburn: Will my right hon. Friend examine the grave situation on Tyneside and further afield, where people who find themselves in debt, such as my constituents Anthony and Gillian McCluskey, are enticed to sell their property at far below its market value to unscrupulous property companies on the assumption that they can rent the property back, only to be given notice to quit very shortly afterwards?

Ruth Kelly: I will certainly look into that issue. I thank my hon. Friend for drawing it to my attention; I understand that he has raised it before in this House. It is vital that anyone who is considering a sale and leaseback arrangement takes good quality legal advice. I know that my hon. Friend is working with his local citizens advice bureau to make sure that potentially vulnerable people are given the best possible advice and steered in the direction of legal advice, so that they can take out appropriate arrangements.

Darfur Asylum Seekers (Removals)

John Bercow: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 24, to discuss a specific and important matter, namely,
	"the removal by the Home Office to Khartoum of failed asylum seekers from Darfur."
	The immediate pretext for my request is the fact that the Home Office is minded tomorrow to remove no fewer than three such people on flights to Khartoum, and there are plans for further removals next week. One example that illustrates the argument comes to mind: Mohammed Abdulhaddi Ali is a black African from the Zaghawa tribe who has demonstrated outside the Sudanese embassy in London and who is a known opponent of the Sudanese Government. I submit to the House that he would be at risk of persecution if he were returned to Khartoum.
	The Government have signed up to the principle of non-refoulement—they accept that they have a responsibility not to return people to states in which there is a serious risk of those people being subject to the death penalty, torture, inhuman or degrading treatment or punishment. The burden of the Government and Home Office argument is that it is unsafe to return people to Darfur but safe to do so to Khartoum.
	My contention to this House is that there are a number of reasons why it would not be safe to return people to Khartoum. There is sporadic but intense fighting between the Government and a variety of rebel forces. It would not be safe to return people to Khartoum, where the national intelligence and security service is based and where it is constantly on the lookout for returnees. It would not be safe to return people who bear tribal scars and who are immediately identifiable by hostile authorities. It would not be safe to return people when we know from the published evidence of the Aegis Trust of a great many cases of people who have been returned only to be subject to intimidation, harassment or substantially worse.
	"Safe as Ghost Houses", which was published last year by the Aegis Trust and authored by Sarah Maguire, is explicit on the issue. The evidence is on the record, and the Government have not issued an intelligible or coherent response to it. It is unsafe to return people when the Sudanese embassy is hand in glove with the Home Office to get people out, with God knows what consequences for those vulnerable people. It is not safe to return people such as those whom I saw last year. I saw video evidence about a man who was returned from this country and who was then brutally attacked and tortured by the Sudanese authorities.
	I put it to the House that we have responsibilities—the country has a responsibility, the Government have a responsibility and this House has a responsibility to very vulnerable people. To kick them out would be wrong and precipitate. The matter must be debated, and debated urgently.

Mr. Speaker: I have listened carefully to what the hon. Gentleman has said. I must give him my decision without stating any reasons. I am afraid that I do not consider that the matter raised is appropriate for discussion under Standing Order No. 24, and I cannot therefore submit the application to the House.

Points of Order

Andrew George: On a point of order, Mr. Speaker. I seek your advice in respect of an answer that I received during Health questions on 6 February from the Minister of State, Department of Health, the hon. Member for Don Valley (Caroline Flint), in response to a question about the activities of and payments to private treatment centres, which are being paid irrespective of whether they complete their work. At column 703, she is recorded as having said:
	"the Plymouth and Bodmin treatment centres are on target for up to 100 per cent. capacity."—[ Official Report, 6 February 2007; Vol. 456, c. 703.]
	Yet following a freedom of information request to the local PCT, it now appears that the private treatment centre at Bodmin—which is represented by my hon. Friend the Member for North Cornwall (Mr. Rogerson), who is assiduous in pursuing the issue—has fulfilled only 45 per cent. of its target in the first six months of this year and 65 per cent. in the second six months, not the 100 per cent. claimed. I am sure that the Minister had no intention to mislead me or the House, but I seek your advice as to what sanctions are available to ensure that inaccurate or misleading information is properly and quickly corrected by Ministers on the Floor of the House.

Mr. Speaker: As the hon. Gentleman said, the information given was probably inadvertently misleading. The beauty of being able to table questions is that he can table another question today, which might tie up with the freedom of information answer that his colleague received. That is the way to resolve the matter.

Iain Duncan Smith: On a point of order, Mr. Speaker. From listening to and watching the news on television over the past three or four days, it has become clear that almost everybody in Britain has been discussing and worrying about the kidnapping of our soldiers and sailors by the Iranians. So far, we have not had a statement of the official position from Her Majesty's Government. Have you received a request to make such a statement, as it would be remarkable if the one place in Britain where the matter was not being discussed was this Chamber?

Mr. Speaker: My understanding is that the Leader of the House announced that there would be a statement this week. I hope that that is helpful to the right hon. Gentleman.

Andrew Selous: On a point of order, Mr. Speaker. I seek your guidance as to how it might be possible to question orally a Minister from the Department for Communities and Local Government on the written statement about local government reorganisation. None of the questions on the Order Paper was appropriate for raising the matter just now. In the county of Bedfordshire, there is confusion and consternation about the written statement. It is not at all clear what will happen to local government, particularly in the middle and southern part of Bedfordshire. Chief executives of local authorities do not know what to tell their staff about whether they will still be in jobs. My constituents deserve better. It is impossible to take forward important local matters when we do not know what councils will exist in future. The House rises in two days, and it is too late for an Adjournment debate. How can I question a Minister orally on the matter?

Philip Dunne: rose—

Mr. Speaker: If the hon. Member for Ludlow (Mr. Dunne) will let me answer the hon. Member for South-West Bedfordshire (Andrew Selous), he might need not need to raise a point of order. I understand that at least three months of consultation will take place with the community at large, which will allow the hon. Member for South-West Bedfordshire to make representations. I agree that we are about to enter a recess, but one of the advantages of that is the Easter recess Adjournment debate, in which the hon. Member for South-West Bedfordshire could raise the matter on the Floor of the House. If the period involved is three months, he will have the opportunity of tabling further questions and of seeking an Adjournment debate, in which the Minister concerned would appear at the Dispatch Box. Does that help, Mr. Dunne?

Philip Dunne: Further to that point of order, Mr. Speaker. In connection with the announcement in the written statement by the Minister for Local Government today, the allegation was made that there has been a broad cross-section of support in the county of Shropshire for the unitary authority proposals. The Minister seems to have completely ignored the ballot of opinion in Shropshire, which was overwhelmingly opposed to a unitary authority. I seek your guidance as to whether we can get Shropshire struck out from the proposals.

Mr. Speaker: I do not comment on the cases that Ministers make. It is for hon. Members to rebut the case that a Minister has made.

BILL PRESENTED

Northern Ireland (St. Andrews Agreement) (no. 2)

Mr. Secretary Hain, supported by the Prime Minister, Mr. Secretary Prescott, Mr. Chancellor of the Exchequer, Secretary John Reid, Secretary Des Browne, Mr. David Hanson, Paul Goggins, Maria Eagle and David Cairns, presented a Bill to modify the effect of the Northern Ireland (St. Andrews Agreement) Act 2006: And the same was read the First time; and ordered to be read a Second time, and to be printed. Explanatory notes to be printed [Bill 84].

Flexible Working

Lorely Burt: I beg to move,
	That leave be given to bring in a Bill to extend the right to request to work flexibly to parents of children up to the age of 18; to make provision for the encouragement of employers to offer flexible working arrangements; and for connected purposes.
	As Liberal Democrat spokesperson for women and equalities and for small businesses, I often have to balance the needs of both groups when looking at policy. It might be thought that flexible working is a topic that would require such balancing. I introduce this Bill, however, in good conscience that I am serving the interests of equality and good business.
	I am indebted to Mrs. Susie Ankrett, who is both a constituent and a small business owner, for suggesting this Bill to me. Mrs. Ankrett runs an award-winning recruitment agency, Plum Personnel, and is well placed to understand the issues from all sides—as indeed am I, having had my own small business and brought up my family at the same time. Even if someone is Superwoman, doing such things while developing a career is tough. That is the dilemma facing so many families today. Women begin their career with roughly equal status with men. I say "roughly", because women graduates still earn on average 14 per cent. less than men at the start of their careers, and by the time they reach the age of 35 to 40 the gap has widened to 40 per cent.
	What happens? It starts when children come along. For me, having my daughter was the most wonderful experience of my life bar nothing, and I am sure that many women feel the same. I am also sure that being a father carries the same sense of privilege for many men. Men want to exercise that privilege, but there is a problem. In many companies there is a long- hours culture—I call it "presentism"—under which someone's worth is valued more by the number of hours that they are at work than by the economic contribution that they make. So when baby comes along, the option of both parents taking their share in the caring is often not feasible. One partner has to make a career sacrifice and take the lion's share of the child care. That is often gladly and willingly done, but the trouble is that the parent who makes that sacrifice will pay the price in future career advancement—and, let us face it, that is usually the mother.
	The mother will, therefore, often take part-time work far below her skill level to fit in with school hours and holidays, and when she wants to return to work full- time she finds that the boys have raced ahead. She still takes the main responsibility for the children, and she is unattractive to employers as a result. The equalities review published only a few weeks ago found that, in the recruitment stakes, women with children under 11 are 45 per cent. less likely to be employed than men. Employers are, therefore, missing out on a wealth of talent that they could be tapping into for fear that a mother will need time off to exercise her caring responsibilities. She has hit the glass ceiling, and they are losing real ability, loyalty and a much stronger economic contribution to their company.
	In the home, the husband often sees too little of the children. He continues to work long hours because the economic responsibilities have fallen to a disproportionate extent on his shoulders. The inequality of the relationship is reinforced by the economic divide, but it does not have to be that way. Flexible working can rescue the situation for the employer and the family.
	Research into flexible working by the Department of Trade and Industry in the 2003 work-life balance study discovered that employers who provided flexible working found that that had a positive impact on employee relations, enhanced employee commitment and motivation, reduced labour turnover, and had a positive effect on recruitment, absenteeism and productivity. Two thirds of respondents to a survey by the Work Foundation said that flexible working helped to reduce absenteeism, and research has shown that flexible working practices have enabled small businesses to recruit and retain higher-quality staff. DTI research in 2000 found that some small businesses saved up to £250,000 through reduced staff turnover, simply by adopting flexible working policies.
	For businesses small or large, flexible working can bring benefits. Let us consider Microsoft, some 85 per cent. of whose UK employees work flexibly. Need I say more? In fact, I do need to, because there are many situations where flexible working would not work for some employees. There are good business reasons for companies to say no, and everyone understands that. Under the current legislation, no employer is forced to accede to a request for flexible working if there is a business case not to. I know that some small businesses feel that employment legislation puts them at a great disadvantage. Small business people want to put their energies into building their businesses, rather than getting bogged down in worrying about falling foul of Government legislation, or acting as an unpaid revenue collector for the Government.
	Maternity leave is a bête noire for many small companies. When one employee constitutes 25 per cent. of the work force, losing them on maternity—or paternity—leave obviously causes a problem. How much better it would therefore be if such an employee could work flexibly, continuing to contribute—albeit in a more limited way—instead of being lost altogether for a period.
	Employment legislation should act as a facilitator for a fair business relationship between employee and employer, not as a dictator. Flexibility works both ways; when there is appreciation of the needs of each party, the situation works to mutual advantage. I would therefore like to see more flexibility in the implementation of Government legislation, allowing mutual agreements that are in the spirit of accommodating the needs of both parties.
	I have talked about businesses, but let us consider fathers for a moment. Again, research supports what is common sense: the more time a dad spends with his child, the less likely that child is to experience developmental problems. That is a benefit to society, as well as to the father. A more balanced home/work life also means that the father is less likely to suffer the stress that damages productivity and increases absenteeism. For women, flexible working could help to raise that glass ceiling, enabling them to enjoy a career and a family without having to be Superwoman to achieve both.
	Existing legislation provides for parents of children up to the age of six to have the right to request flexible working. In my view, there is a business and a social case for extending that right to all workers, which the Equal Opportunities Commission and the Minister for Children and Families, the right hon. Member for Stretford and Urmston (Beverley Hughes), have called for. I would like to see a definition of flexible working wide enough to accommodate the needs of all parties. However, before such a step is enshrined in legislation, I want to see a full economic impact assessment, and a pilot study to assess the effects post-implementation, as well.
	Today, I want simply to pave the way for this enhancement, which extends the right to request flexible working to parents of children up to the age of 18. I submit that parents of children aged between six and 18 have just as important a parenting role, and just as many trials, tribulations and challenges—and triumphs—to face. How much better it would be if mum and dad could still be around, particularly at stressful times such as when their children change school, or at exam time?
	I leave the last word to the right hon. Member for Witney (Mr. Cameron), the leader of the Conservative party, who in a recent speech to the Working Families charity said:
	"Flexible working is good for families, business and society".
	 Question put and agreed to.
	Bill ordered to be brought in by Lorely Burt, Susan Kramer, Jo Swinson, Annette Brooke, David Haworth, Stephen Williams, Lynne Featherstone, Danny Alexander, Jenny Willott, Sandra Gidley and Dr. Evan Harris.

Flexible Working

Lorely Burt accordingly presented a Bill to extend the right to request to work flexibly to parents of children up to the age of 18; to make provision for the encouragement of employers to offer flexible working arrangements; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 19 October, and to be printed [Bill 85].

Northern Ireland (St. Andrews Agreement) (No. 2) Bill

Ordered,
	That the following provisions shall apply to the proceedings on the Northern Ireland (St Andrews Agreement) (No. 2) Bill—
	 Timetable
	1.—(1) Proceedings on Second Reading, in Committee, on consideration and on Third Reading shall be completed at this day's sitting.
	(2) Those proceedings shall be brought to a conclusion, if not previously concluded, three hours after the commencement of proceedings on the Motion for this Order.
	 Timing of proceedings and Questions to be put 
	2.—(1) As soon as the proceedings on the Motion for this Order have been concluded, the Order for the Second Reading of the Bill shall be read.
	(2) When the Bill has been read a second time—
	(a) it shall, notwithstanding Standing Order No. 63 (Committal of bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put;
	(b) the Speaker shall leave the Chair whether or not notice of an Instruction has been given.
	3. On the conclusion of proceedings in Committee the Chairman shall report the Bill to the House without putting any Question and, if the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.
	4. For the purpose of bringing any proceedings to a conclusion in accordance with paragraph 1 the Speaker or Chairman shall forthwith put the following Questions (but no others)—
	(a) any Question already proposed from the Chair;
	(b) any Question necessary to bring to a decision a Question so proposed;
	(c) the Question on any amendment moved or Motion made by a Minister of the Crown;
	(d) any other Question necessary for the disposal of the business to be concluded.
	5. On a Motion so made for a new Clause or a new Schedule, the Chairman or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
	 Consideration of Lords Amendments
	6.—(1) Any Lords Amendments to the Bill shall be considered forthwith without any Question being put (and any proceedings interrupted for that purpose shall be suspended accordingly).
	(2) Proceedings on consideration of Lords Amendments shall be brought to a conclusion, if not previously concluded, one hour after their commencement; and any proceedings suspended under paragraph 6(1) of this Order shall thereupon be resumed.
	7.—(1) This paragraph applies for the purpose of bringing any proceedings to a conclusion in accordance with paragraph 6.
	(2) The Speaker shall first put forthwith any Question already proposed from the Chair and not yet decided.
	(3) If that Question is for the amendment of a Lords Amendment the Speaker shall then put forthwith—
	(a) a single Question on any further Amendments of the Lords Amendment moved by a Minister of the Crown, and
	(b) the Question on any Motion made by a Minister of the Crown, That this House agrees or disagrees with the Lords in their Amendment or (as the case may be) in their Amendment as amended.
	(4) The Speaker shall then put forthwith—
	(a) a single Question on any Amendments moved by a Minister of the Crown to a Lords Amendment, and
	(b) the Question on any Motion made by a Minister of the Crown, That this House agrees or disagrees with the Lords in their Amendment or (as the case may be) in their Amendment as amended.
	(5) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown, That this House disagrees with the Lords in a Lords Amendment.
	(6) The Speaker shall then put forthwith the Question, That this House agrees with the Lords in all the remaining Lords Amendments.
	(7) As soon as the House has agreed or disagreed with the Lords in any of their Amendments, or disposed of an Amendment relevant to a Lords Amendment which has been disagreed to, the Speaker shall put forthwith a single Question on any Amendments moved by a Minister of the Crown and relevant to the Lords Amendment.
	 Subsequent stages
	8.—(1) Any further Message from the Lords on the Bill shall be considered forthwith without any Question being put (and any proceedings interrupted for that purpose shall be suspended accordingly).
	(2) Proceedings on any further Message from the Lords shall, if not previously concluded, be brought to a conclusion one hour after their commencement; and any proceedings suspended under paragraph 8(1) of this Order shall thereupon be resumed.
	9.—(1) This paragraph applies for the purpose of bringing any proceedings to a conclusion in accordance with paragraph 8.
	(2) The Speaker shall first put forthwith any Question which has already been proposed from the Chair and not yet decided.
	(3) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown which is related to the Question already proposed from the Chair.
	(4) The Speaker shall then put forthwith the Question on any Motion made by a Minister of the Crown on or relevant to any of the remaining items in the Lords Message.
	(5) The Speaker shall then put forthwith the Question, That this House agrees with the Lords in all the remaining Lords Proposals.
	 Reasons Committee 
	10.—(1) The Speaker shall put forthwith the Question on any Motion made by a Minister of the Crown for the appointment, nomination and quorum of a Committee to draw up Reasons in relation to the Bill and the appointment of its Chairman.
	(2) A Committee appointed to draw up Reasons shall report before the conclusion of the sitting at which it is appointed.
	(3) Proceedings in the Committee shall, if not previously concluded, be brought to a conclusion 30 minutes after their commencement.
	(4) For the purpose of bringing any proceedings to a conclusion in accordance with sub-paragraph (3) the Chairman shall—
	(a) first put forthwith any Question which has been proposed from the Chair but not yet decided, and
	(b) then put forthwith successively Questions on motions which may be made by a Minister of the Crown for assigning a Reason for disagreeing with the Lords in any of their Amendments.
	(5) The proceedings of the Committee shall be reported without any further Question being put.
	 Miscellaneous 
	11.—Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply in so far as necessary for the purposes of this Order.
	12.—The proceedings on any Motion made by a Minister of the Crown for varying or supplementing the provisions of this Order shall, if not previously concluded, be brought to a conclusion one hour after their commencement and paragraph (1) of Standing Order No. 15 shall apply to those proceedings.
	13.—Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.
	14.—No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken or to re-commit the Bill; and the Question on any such Motion shall be put forthwith.
	15.—No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown; and the Question on any such Motion shall be put forthwith.
	16.—(1) This paragraph applies if—
	(a) a Motion for the Adjournment of the House under Standing Order No. 24 (Adjournment on specific and important matter that should have urgent consideration) has been stood over to Seven o'clock, but
	(b) proceedings to which this Order applies have begun before then.
	(2) Proceedings on that Motion shall stand postponed until the conclusion of those proceedings.
	17.—If the House is adjourned, or the sitting is suspended, before the conclusion of any proceedings to which this Order applies, no notice shall be required of a Motion made at the next sitting by a Minister of the Crown for varying or supplementing the provisions of this Order.
	18.—Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.
	19.—The Speaker shall not adjourn the House until—
	(a) any Message from the Lords on the Bill has been received;
	(b) he has reported the Royal Assent to any Act agreed upon by both Houses .—[Mr. Hain.]

Northern Ireland (St. Andrews Agreement) (No. 2) Bill

Order for Second Reading read.

Peter Hain: I beg to move, That the Bill be now read a Second time.
	I thank the House for its indulgence in allowing, at very short notice, planned business to be disrupted. I am especially grateful for the co-operation of the Opposition parties.
	I wish to begin by congratulating the leader of the Democratic Unionist party, the right hon. Member for North Antrim (Rev. Ian Paisley), on his courage and his leadership. When he sat for the very first time alongside the leader of Sinn Fein, the Member for Belfast, West (Mr. Adams), in Parliament buildings at Stormont yesterday, they took Northern Ireland closer to a final political settlement than anyone has ever before thought possible. Their pictures together resonated around the world, a graphic manifestation of the power of politics over intolerance, bitterness and horror.
	Those implacable foes have individually and collectively said that now is the time for Northern Ireland to move forward into a new era. They have together taken charge of the process from the British and Irish Governments. As a result, the political settlement that will emerge will be far stronger and more robust than anything imposed by Government, precisely because it is grounded in local agreement. That is where we have wanted to be since before the Good Friday agreement was signed almost nine years ago: locally accountable politicians taking responsibility for the future; locally accountable politicians showing that whatever their differences—and it is hard to imagine two parties with greater differences—they can work for the common good without sacrificing either principle or integrity.
	I do not need to remind this House of the tortured history of Northern Ireland over four decades, or of all the attempts by the Government, working closely with our Irish counterparts, to bring peace and stability, or—especially—of the courage of SDLP leaders, such as John Hume, and Ulster Unionist party leaders, such as David Trimble.
	We have seen enormous progress, especially since the Good Friday agreement. The security situation has been transformed. The IRA has declared its war over and decommissioned its weapons. It has closed down the criminal activity that used to fund the conflict, because there is no conflict to fund. Sinn Fein has committed to the active support of the police and criminal justice institutions. There has been a new beginning to policing and the rule of law, stretching right across the communities. There is peace, and there are more jobs and more prosperity than ever in Northern Ireland's history. The final piece in the jigsaw is long-term political stability. That has proved to be elusive.

Patrick Hall: My right hon. Friend will have encountered the understandable deep caution and occasional cynicism of the people of Northern Ireland, after what they have had to put up with over the past decades. In the vital weeks ahead, what will he do to give them confidence that, at long last, this is a time for them—and us—to hope?

Peter Hain: I welcome my hon. Friend's support. This is a tremendous time for hope and progress, as I shall explain.
	There have been numerous attempts by both Governments working together to broker a deal that would stick. In our view, the best—and possibly the last—hope in the foreseeable future to bring about that deal came after the talks at St. Andrews last October.

Lady Hermon: The Secretary of State will know that thousands of people voted at the ballot box on the understanding that his words had some meaning when he promised that devolution would happen on 26 March—that is, yesterday. What confidence can the people of Northern Ireland have that the right hon. Gentleman will ever keep his word to them again?

Peter Hain: I pay tribute to the hon. Lady's role in the peace process over many years, and I shall explain why the situation has developed as it has.
	The St. Andrews agreement, with its twin pillars of support for policing standing alongside the commitment to share power, provided the basis for a lasting settlement. Last November, during the passage of the St. Andrews legislation, I made it clear that, if a power-sharing Assembly and Executive did not result, it would be a considerable time before an opportunity like it ever came round again. That was quite simply because I, and many others, thought that the parties themselves would never agree a way forward on their own. I am delighted to have to revise that view in the light of the extraordinary events of the past few days.
	I turn now to the point raised by the hon. Member for North Down (Lady Hermon). The House will recall that the legislation set in statute the date for the restoration of devolved government in Northern Ireland. That date was 26 March— yesterday. The legislation was explicit: if an Executive were not formed on that date, the Assembly would dissolve. As a consequence, Members' salaries and allowances would stop. Water charges would come into force, academic selection at age 11 would go, and partnership with the Irish Government would deepen.
	Everyone knew the position when the election was held on 7 March. I said more than once that 26 March was a deadline that would not move, and that failure to meet it would have consequences. There would only ever be one set of circumstances in which progress outside that framework could be made and that would be if the parties, for the very first time ever, formed a consensus around an agreed way forward.
	It is axiomatic in Northern Ireland that there is not a political wire down to which the parties do not go. There were those who said that we were bluffing, that deadlines come and go and that, if we got close enough to a deal, extra time would be claimed. With my right hon. Friend the Prime Minister, we made it clear that there would be no extension to the deadline in the absence of an agreed way forward brought to us by the parties. When we were asked by the Democratic Unionist party last Wednesday to grant an extension we said no, because we could not credibly return to this House and ask for more time unless the DUP could persuade the other parties that there was a credible reason for doing so. We were asked again last Friday. Again we said no—unless the DUP managed to get other parties, including Sinn Fein, to agree.
	Had we not been resolute, we would not have had the historic agreement yesterday—and the significance of that agreement cannot be overestimated. It is for that reason that this Bill, which will have the effect of moving the date of the restoration of devolution to 8 May, is before the House today. Both the DUP and Sinn Fein have agreed on that date, and both have asked that the introduction of water charging be deferred until the Executive are formed. I have agreed to both requests, and I ask for the support of the House in that.
	I know that there will be many victims of the troubles, including Members of the House, who will find this moment especially painful, but we have reached a turning point in the history of Northern Ireland. There are many here and in another place, and from both sides of the House, notably John Major, who have played their part over the years to bring peace and stability to Northern Ireland. That we are where we are today is a tribute to them.

Douglas Hogg: The right hon. Gentleman said that we have reached a turning point, and no doubt that is true. Would it be even more of a turning point if Sinn Fein Members who were elected to the House took their place? Does he agree that one way in which we can facilitate that is to change the Oath so that they can take an oath that is acceptable to them?

Peter Hain: The right hon. and learned Gentleman makes an interesting point, but it is not a point for us today.
	That we are where we are today is a tribute to all those people, especially my right hon. Friend the Prime Minister. He has brought a forensic understanding of the politics of Northern Ireland—and, allied to it a fierce tenacity and a level of commitment—as has no other Prime Minister.

David Anderson: Does the Secretary of State agree that while it is right and proper to praise both John Major and the present Prime Minister, we should praise the ordinary people—in fact, the extraordinary people—on the ground, who did not stop working across sectarian barriers? Trade unionists and public service workers stood through 40 years of the troubles, and never ever gave up on their belief in peace.

Peter Hain: I could not agree more strongly with my hon. Friend about the role played by the trade union movement, and the role that it continues to play in bridging the divide between the communities, pressing ahead with a policy of social justice across the divide and making sure that the interests of the people of Northern Ireland, especially the employees of Northern Ireland, are always to the fore. He is absolutely right, and his own trade union—Unison—has done a tremendous job, and continues to do so.

Ian Paisley: I hope that the Secretary of State does not leave out the people who keep the shops going when they are bombed and destroyed, and who do not shut down—"Business as usual tomorrow". Those people kept Ulster sane in that time of terrible trial.

Peter Hain: The right hon. Gentleman is absolutely right. There have been tens of thousands, if not hundreds of thousands, of heroes and heroines over the generations who have stood for decency and justice. I singled out the trade union movement for the remarkable role that it has played, as within its ranks there are people of widely divergent views, from republicans to loyalists, working together for the common good.

Jim Devine: May I place on record my appreciation for the work that my right hon. Friend has done in bringing about what is without doubt an historic achievement? In today's press, we saw the picture to which he referred of the right hon. Member for North Antrim (Rev. Ian Paisley) and the hon. Member for Belfast, West (Mr. Adams), who were described in the  Irish Independent as the "darling buddies of May". One hopes that that can continue.

Peter Hain: I think that I will leave that description to the newspapers, with my hon. Friend's assistance. However, I thank him for what he said, and I thank everyone for the way in which they have worked together on the process, particularly my ministerial team: my deputy, my right hon. Friend the Minister of State; the Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Wythenshawe and Sale, East (Paul Goggins), who is responsible for security; the Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Liverpool, Garston (Maria Eagle), who is responsible for education; and, of course, the Under-Secretary of State for Northern Ireland, my hon. Friend the Member for Inverclyde (David Cairns), who doubles up as the Under-Secretary of State for Scotland.

Keith Vaz: I do not want this to sound like a love-in, but the Secretary of State has been described during this process as "Hain the pain". Has the pain been worth the gain?

Peter Hain: I have to say yes. In a republican area of Belfast there is graffiti saying "Hain is insane".  [ Interruption. ] The hon. Member for East Antrim (Sammy Wilson) raises his thumb to that. In a loyalist area of Belfast, there is graffiti saying "Sinn Hain", so obviously there is universal support for my work as Secretary of State, just as there is among Government Back Benchers.

Ronnie Campbell: It was great to see the politicians come together yesterday, but does my right hon. Friend not agree that the most important thing in Northern Ireland is bringing the communities together?

Peter Hain: I very much agree with my hon. Friend. There have been signs of progress in that direction for a number of years, especially over the past nine years. For example, late last year I opened the first integrated housing estate, a social housing project near Enniskillen. That is a sign of progress and there are many others.
	One of the achievements of our Labour Government of which my right hon. Friend the Prime Minister should justly be most proud is the way in which we have brought peace, stability and progress to Northern Ireland. The work he has done with Taoiseach Bertie Ahern has been quite simply remarkable. We have been backed up by some of the most dedicated and outstanding civil servants I have ever worked with, from the Prime Minister's chief of staff, Jonathan Powell, to my own staff in the Northern Ireland Office.
	I also want to pay tribute to the political parties in Northern Ireland. I have not always seen eye to eye with them and I have not always agreed with their analysis, but I have never doubted their commitment to work tirelessly for the people they represent. Now they have the opportunity to discharge their responsibilities to their voters, and to do so in their own way. That is as it should be, and to hasten that day I commend the Bill to the House, signifying as it does the triumph of peace over conflict.

David Lidington: On the Conservative Benches we welcome the Bill and it will have our support this afternoon. The Government's decision for a further delay of just a few weeks was a sensible and pragmatic response to the dramatic events of the past couple of days.
	Like the Secretary of State, I congratulate the leaders of all the Northern Ireland parties on a major step forward towards the longed-for enduring political settlement for Northern Ireland. I want in particular to pay tribute to the generous words spoken by the right hon. Member for North Antrim (Rev. Ian Paisley) during his momentous joint press and public statement yesterday. As the Secretary of State said, yesterday's agreement was the fruit of many years of work by officials and Ministers of various Governments both in this country and the Republic of Ireland, and in the United States of America under successive Administrations.
	Today, it is right that I particularly acknowledge from the Conservative Benches the commitment that the Prime Minister has made. He took forward the process begun by John Major and he has invested unprecedented amounts of both time and energy in the pursuit of peace in Northern Ireland. It is no great secret that there have been occasions when we disagreed with the Prime Minister, and even with the Secretary of State—sometimes vehemently—about particular decisions that they had taken. When the history books are written we shall find out who was right. One might say that the earthly reputations of all of us as politicians are, in the last resort, in the hands of history, but it is true to say that without the Prime Minister's unremitting personal commitment the political process in Northern Ireland would not be within sight of the success that we can see today.
	However, although this is an occasion for hope, optimism and looking forward, it is not yet a moment when we can indulge in euphoria, and least of all in complacency. This morning, I noted that a number of newspaper commentators made a comparison between the events at Stormont yesterday morning and the famous meeting between Yitzhak Rabin and Yasser Arafat on the lawn of the White House—but we know now that the hopes that Prime Minister Rabin and President Arafat held then lie in ashes. Although we should unite in welcoming what was achieved yesterday, we must be unflinching in facing up to the huge problems that still confront Northern Ireland and stand in the way of reconciliation.
	On policing, there is no doubt that Sinn Fein's belated and long-overdue decision to support the Police Service of Northern Ireland and the courts made an agreement yesterday possible, but we will continue to look for demonstrable evidence that that declaration of support is indeed bearing fruit locally. Bogus distinctions between so-called civic and so-called political policing will undermine the credibility on this issue that the Sinn Fein leadership seeks to achieve. It is easier to decommission guns than criminal livelihoods. Support from all the political parties in Northern Ireland is essential if Northern Ireland is finally to be rid of the scourge of organised crime and particularly that run by paramilitary gangs.

Peter Hain: I completely agree with the hon. Gentleman. In that respect, I am encouraged by a whole series of initiatives that the Sinn Fein leadership has taken. Following representations by the right hon. Member for North Antrim, after an attack on Councillor Brush, a former Ulster Defence Regiment soldier, the local Sinn Fein Member Michelle Gildernew said that she would encourage anyone with any information on the matter to co-operate with the Police Service of Northern Ireland. That is further progress of the kind we need to see.

David Lidington: I am grateful to the Secretary of State. Like him, I am encouraged by those demonstrations of support. The more of that we see, the better the chance of moving beyond the appalling divisions and violence of the past towards a genuinely shared future in Northern Ireland.

Lady Hermon: I am sure that the hon. Gentleman will be well aware that his colleague, the right hon. and learned Member for Rushcliffe (Mr. Clarke), today published a pamphlet—I take it that it is a policy statement from the Tory party—on how to increase confidence in politicians and how to encourage people to vote. Does the hon. Gentleman agree that one of the greatest casualties yesterday was trust in the entire Northern Ireland ministerial team, who gave undertakings and commitments in the House that there would be no emergency legislation to break through the 26 March deadline?

David Lidington: Unlike the hon. Lady, I have not yet had the pleasure of reading the report by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). It is a treat that I shall look forward to. I can reassure her on one point: it is not a formal policy statement on behalf of my party; it is a report from the vigorous policy commission on the revival of democracy, which my right hon. and learned Friend heads.
	In response to the substance of what the hon. Lady said, we expressed doubts about the deadline at the time. To be honest, I suspect—I claim no scientific knowledge—that the general feeling in Northern Ireland will be one of relief at what was achieved yesterday and that there will be a desire to move forward from arguments about deadlines in the House to practical arguments about policies that really matter to people living in Belfast, Bangor and elsewhere in Northern Ireland.

Jeffrey M Donaldson: Is the hon. Gentleman aware that the Democratic Unionist party has been inundated with messages of support from right across Northern Ireland—from every constituency, including that of the hon. Member for North Down (Lady Hermon)? People who are relieved and delighted by what has happened are supporting what we have done. We have had offers of investment from right across the globe, from people who want to have a stake in the future of Northern Ireland.

David Lidington: I suspect that the calls to the DUP's headquarters are probably a reflection not just of their supporters—who, it has been clearly demonstrated, support what the right hon. Member for North Antrim did yesterday—but of the longing of people in Northern Ireland, whether nationalist or Unionist, to move away from the abnormal situation that we have been in for decades towards what everybody in England, Scotland and Wales would consider to be normal political debate.

Iris Robinson: Does the hon. Gentleman agree that the hon. Member for North Down (Lady Hermon) appears to be so hung up on a date that she would prefer academic selection to have been done away with and for bills for water charging to drop on the mat of each constituent throughout the Province?

David Lidington: I hope that the hon. Lady will forgive me if I do not intervene in that particular battle on the Unionist Benches.
	All Northern Ireland parties have a responsibility to show that they are there for all the people of Northern Ireland, not just one community or another. One of the most hopeful signs in yesterday's public statements was the clear commitment by the right hon. Member for North Antrim and the leader of Sinn Fein to work on behalf of everyone in Northern Ireland.

Douglas Hogg: I entirely agree with what my hon. Friend says about the responsibilities of the Northern Ireland parties. May I put to him a point that I made to the Secretary of State? It would be a very good thing if Sinn Fein Members were to take their seats in this place. If there are artificial barriers that stop them, such as the Oath, would we not be wise to see whether we could take reasonable steps to make it easier for them to sit here?

David Lidington: I would be pleased if Sinn Fein Members dropped their policy of abstention. When I made that point to leading members of Sinn Fein, they told me that it is not the Oath that stops Sinn Fein Members from taking their seats, but their belief that this Parliament should have no say in governing any part of the island of Ireland. Until they are prepared to move on from that firm and regrettable ideological position, the sort of proposal that my right hon. and learned Friend makes would be a largely academic exercise.
	The sad truth about the situation in Northern Ireland today is that despite all the encouraging signs of movement towards political normality, the so-called peace lines—the high metal fences that divide residential estates in north and west Belfast—are higher and stretch longer today than they did before the IRA ceasefires of the mid-1990s. It is when those divisions start to heal and both the physical and psychological barriers between communities start to come down that we can truly believe that the dreadful conflict that scarred the history of Northern Ireland for much of the 20th century has come to an end. The Bill marks an important milestone along that slow and difficult road.

Ian Paisley: This is a good day for the House, a good day for our United Kingdom and a good day for the whole of the people of Ireland, whether north or south, for it is a day when there has risen at last in the darkness a star of hope. However, it is only a star of hope, and we must remember that. We are not near across the river, and we have some very hard things to do and great sacrifices to make in order that this start will not be like many other starts. I was accused of not shaking hands with the leader of the Sinn Feiners and I said, "Why should I?" All the people who shook hands with him are gone—do you want me to go, too? I have no intention of going.
	We must face up to the fact that the Democratic Unionist party and I are in a strange position today, because we seldom got any credit for what we stood for and what we did. When the first agreement was signed, I remember that they celebrated with songs, handshakes, dancing—and kicking me, for I happened to be there. I was well kicked by them all and cursed as well. Then the Secretary of State at the time, Mo Mowlam, got me wrongly arrested, and the Assistant Chief Constable had to come and get me out. I have been through all that, but people who know me will realise that I am not saying that just to bring back the old bitternesses. Let us get the old bitternesses away. As I said to the leader of Sinn Fein, it is not a love-in but a work-in that we are engaged in, and when the people start to work for the things that they need, we will find a cure for some of the terrible problems that are still there; that is when we will get those bitternesses away.
	I agree fully with the hon. Member for Aylesbury (Mr. Lidington) that many things are not there yet. I trust that they will be put in place, and that we will have full deliverance on policing. I might add that at the meeting, we raised not only the matter of which the House has been informed by the Secretary of State, but a matter concerning a man from Sinn Fein's own district in Belfast, Mr. McCartney. We raised that issue again, and we said that we felt that it would be a great opportunity for Sinn Fein to do something about Mr McCartney's death. We got a promise that something would be done, and we look forward to something being done.
	I must say that the Secretary of State really brought himself to feel the cane on the matter of the date of 26 March. He was belligerent with us all; he warned us and told us. I said to him, "You can argue with Ulster people, and you can present your arguments strongly. You can even be stern with them, but if you bully them, you'll get nowhere." He did not believe me, but he believes me now; the proof of the pudding is in the eating. I do not think that we should rub that in.  [Laughter.] Perhaps I have done enough rubbing already. All I am saying is that I am glad that Ulster people, whether they be Sinn Feiners or Unionists, will, at the end of the day, have some say in how they are governed. When that is established, this whole movement will take a leap forward.
	I thank the House for what has been said. I trust that it will realise that we do not have a magic wand, and that there will be hard work, difficulties, fights, tough talking and rough riding, but we should keep before us what I said yesterday—that after all, all the elected representatives of Northern Ireland have an onus of responsibility to all the people. I am not here today to say that I will represent Unionists; I am here to say that I want to see achieved whatever is good for the people of the whole of Northern Ireland.

Lembit �pik: Having listened to the contribution of the right hon. Member for North Antrim (Rev. Ian Paisley), I think that I can speak for the House when I say that I feel the hand of Paisley on my shoulder, not least because he is sitting right behind me. I have covered Northern Ireland issues for the Liberal Democrats for 10 years now, but I have lived with Northern Ireland politics for 40 years. I remember the feeling of fear and, frankly, hopelessness of the 1970s, when politics in the Province was measured more in lives lost than votes won. Even as a teenager, the hate that I observed seemed as endemic as the violenceand back then, it probably was.
	What has changed is that there seems to be a willingness to give peace a chance, and to turn a clichd but hopeful slogan into a fledgling political partnership, even though we know that partnership needs real proof of good faith to become more than just an act of provisional trust. I congratulate the Government for getting as close as they have done. I have known the Secretary of State for Northern Ireland for many years, and I regard the measures that we are discussing as his greatest political achievement. I share his vision for a stable and sustainable Stormont Assembly and a shared future for the people of Northern Ireland. The right hon. Gentleman has the right to feel a sense of gratification that his endeavours have helped to achieve it.
	In regard to the Prime Minister, who may indeed be looking for a legacy, it is true to say that he should reasonably regard the developments in the Northern Ireland peace process as a proud and legitimate element of that legacy.
	When we debated the previous emergency legislation in November 2006, I said that I believed the St. Andrews agreement could bind the DUP into a commitment to assume power alongside Sinn Fein. I was optimistic enough to believe it could happen, even though others were not. I am glad to say that it is a testimony to the optimism of the Secretary of State that we have come this far.
	When Sinn Fein's ard fheis and its leaders encouraged supporters to co-operate with the Police Service of Northern Ireland, I said then and I say now that it was a momentous move forward. Again, the optimists were right and I praise the journey that Sinn Fein and the IRA have taken. Others doubted that this would be so, but I never did. My confidence in the republican movement was based on the people I met, and I judged them to be sincere. They have proved that faith in their positive intentions was not misplaced, though of course it must now result in action.
	In yesterday's momentous meeting, the DUP categorically committed to entering a power-sharing Government with Sinn Fein on 8 May. That is six weeks from now. The right hon. Member for North Antrim has taken a very strong position throughout and his conditions have been met. It is important to recognise that. His party said that it was condition-led. He has achieved what he laid out as his goals in the previous two Assembly elections. In large part it is thanks to his contribution that the restoration of devolved government is now just weeks away. So we must recognise the potentially historic significance of the statement yesterday.
	However, I am disappointed that the deadline of 26 March, as set down by the emergency legislation passed last November, has not been met. We are faced with yet another delay, yet another piece of legislation on Northern Ireland rushed through Parliament, despite Government assurances that there was no time to do that. I understand the reasons for this. I understand why the Minister has felt the need to let deadlines come and deadlines go, reassuring us almost every time that there was no plan Band always, of course, there was. The most reliable insurance policy to guarantee that 8 May will be the date for the restoration of the Assembly comes not from the Government, but from Sinn Fein and the DUP. It is their deadline that I choose to believe.
	It follows that if for any reason 8 May does not work out, there is no point in the Government pretending that they have any leverage left to threaten anybody in this place, in another place or in Northern Ireland with deadlines again. They have put all their cards on the table, for reasons that I understand. When it comes to deadlines, they have no more cards to play.

Paul Goodman: I thought that I heard the Secretary of State say earlierI may be wrongthat he had always been prepared to extend the deadline if the parties could find an agreed way forward together. Did I hear the Secretary of State say that? Is the hon. Gentleman convinced that that was the case?

Lembit �pik: I will leave the hon. Gentleman to check  Hansard with regard to his former question, but on the latter, I am in no doubt at all that the Secretary of State told the House that the deadline was immovable and absolute. As I say, I understand why he has taken this position, and thus I do not condemn him for it. Instead, I make an observation about the future, rather than about the past. The future allows the Government no leverage with regard to deadlines, so we must hope that on this occasion it works.
	There are many people who remain sceptical about the ability of the DUP and Sinn Fein to produce genuine power sharing. However, it is those two parties who primarily have been entrusted by the electorate with the mandates and responsibility to govern. It is up to them to rise to the challenge, and it is up to others, including my sister party, the Alliance party, to hold them to account and to provide constructive opposition as and when necessary. I am determined to ensure that the next six weeks are used to their full advantage. There are discussions going on about an entire programme for government, including the Treasury's financial package. I hope sincerely that the details are hammered out. Unless they are, we will have trouble ahead.
	My colleagues in the Alliance partyincluding David Ford, who I think I can suggest is a First Minister in waiting in Northern Ireland politics

Patrick Cormack: He will have a long while to wait, I fear.

Lembit �pik: However long or short a time that may take, I believe it will happen.
	My colleagues in the Alliance party say that about 1 billion is wasted in Northern Ireland every year on managing a divided society, through implicitly providing separate services for different sides of the same community. Resources would be much better spent on providing quality public services for the entire community, rather than providing services a few hundred metres and a physical or psychological wall apart in a fashion which, in 2007, is out of date. After all, if Sinn Fein and the DUP can do business together in the dining hall of Stormont, surely Catholics and Protestants can exercise together in the sports halls of Belfast and the Province.
	The segregation that is ending in politics must also end in the community, but it will take the expenditure of some resources in the short term to release money. Northern Ireland currently receives a larger subvention than any other region in the United Kingdoma position that is not sustainable. I hope that the Government will work in the weeks ahead, before 8 May, to ensure that there is a clear programme of economic government to accompany the political changes that are taking place.
	The mutual respect that I want to see in the community must also apply to political parties. There are many in Stormont who have been loyalists to the cause of a shared future, a cross-community approach to the governance of the Province. They were shown attention when the Government needed them and ignored when the Government did not. That is disrespectful, thoughtless, and ultimately a betrayal of a decade of good faith.
	I want the Government to commit themselves to ensuring that all parties will be involved in the brokerage of solutions in the six weeks ahead, because if anything does go wrong, there will be no good will left for the Government to fall back on from those allies who feel ignored. What plans have the Government to offer briefings to all parties going into government and into opposition, and how will the unique arrangements of statutory committees be reflected in such briefings? It is important for any restored Assembly to be given the chance to make a difference and to prove its worth. We hope that the legislation we are pressing today achieves what we want to see: a stable and long-lasting settlement in Northern Ireland.

Peter Hain: I agree with what the hon. Gentleman is saying, and I think that the leadership shown by the right hon. Member for North Antrim (Rev. Ian Paisley) and his party in meeting all the parties yesterday was intended to do precisely that.
	The parties are now taking charge of the process. It is not for me to prepare for government; it is for them to prepare for government. That is what they are doing, and that is what has transformed the situation.

Lembit �pik: I am pleased to hear the Secretary of State's words, but I can tell him that there are individuals who have acted in good faith for many years and have bailed out the Government and the devolution process on at least one occasion. I am thinking of David Ford and his colleagues in the Alliance party, who have repeatedly felt passed over at times of great importance in Northern Ireland political debate, only to see the Government returning cap in hand and asking for support at times when they have found themselves in a difficult corner.

Patrick Cormack: I think the hon. Gentleman is being a little unrealistic and a little churlish. I also think he should recognise that the Alliance has the number of members it has because people voted for that number of members.

Lembit �pik: Indeed. Contrary to all predictions in the Chamberapart from minethe Alliance increased the number of its seats. I have made that point, and the Minister knows exactly what I mean. It it is to the credit of the DUP at this stage that it has been consulting all parties, but the consultation must be meaningful. It must not consist simply of the relating of decisions made to the exclusion of the minority parties.

Ian Paisley: I assure the hon. Gentleman that we met all the parties, and have agreements with them on how we will meet and continue the dialogue.

Lembit �pik: I am encouraged to hear that. It is symptomatic of the positive changes that have taken place this year. I am sure that members of minority parties in Northern Ireland who are listening will accept the right hon. Gentleman's comments in good faith, and with the positivity that I consider appropriate to the important strategic statement that he has just made.
	There has been talk of stopping Stormont Assembly Members' salaries. While there are those who are still frustrated by many years of paid silence in the corridors of power in Stormont, perhaps we can now leave that aside. I am sure that no reasonable suggestion about future financial arrangements would be refused, but let us be clear about this: if for some reason things do not happen on 8 May, I will sincerely expect the Minister to be true to his word and stop paying individuals for not delivering on devolution.
	The Liberal Democrats have always been friends of the process, and I have always sought to be a friend, albeit sometimes a critical friend, to successive Secretaries of State as they have stumbled to find their way through the mire of political quicksand that has sometimes threatened to engulf them. Unlike others, I have never allowed political expediency to get in the way of what is right for the processes of peace. Even when criticised by other parties, we have done our best to support the Government.
	Those of us who have helped the Government in good faith expect good faith back in return. The process is not yet over, although I sincerely hope that we are in the endgame. Until we have finished the discussions of the next six weeks, my advice is that the Government had better take care of their friends, because there are many who offer good will, but expect the good will to be returned.

Mark Durkan: Thankfully, unlike much of the tortuous process of past years, what we have in front of us today is short and simple, in the form of this Bill.
	The Secretary of State will recall that some of us predicted that we would be here in late March facing more emergency legislation, probably providing for a date in May. When we honestly offered that as our best surmise about what was likely to happen, we were rubbished by the Secretary of State and others. To that extent, our judgment and assessment has been vindicated, but it included the assumption that we would have the required arrangements at least by May.
	Some of us have always believed in power sharing and have stuck with that belief since the 1970s, in the darkest days of the troubles. Stars of hope arose in the past when parties got together and promoted power sharing, but those stars were shouted down and shot down by people in parties such as the DUP and by people in the provisional republican movement. The unswerving belief by parties such as the Social Democratic and Labour party and others that power sharing, partnership, co-operation and shared institutions that deliver a shared futurenot only in the north but on a north-south basisare the way to create a future for forthcoming generations has absolutely been vindicated by recent developments.
	I have observed before that our peace process has carried more people on more roads to Damascus than the Syrian bus fleet, and we saw that again yesterday. Not only did the DUP and Sinn Fein agree power sharingin different ways, they can say that they have previously agreed thatbut in meeting as they did, they entered into a sort of political compact. That is very positive. The fact that they were able to present the option of a new date for devolution on 8 May and to make the commitments that they did is a much more hopeful sign of how things are going to work than what we legislated for in this House previously, when we had to remove, at the DUP's insistence, the provision for the joint election of the First Minister and Deputy First Minister because it was said that they could not be jointly elected under the Good Friday agreement, and that it should be done separately. Now that people are prepared to engage in this sort of compact, we will be able, under the review of the workings of the agreement, to revert to joint election in future.
	I pay tribute to the right hon. Member for North Antrim (Rev. Ian Paisley) and to the hon. Member for Belfast, West (Mr. Adams) for, as the right hon. Member for North Antrim has said, meeting the other parties yesterday. The president of Sinn Fein met the other parties, not in a series of bilaterals, but at least in order to share some thoughts about certain issues with other parties.
	If we are to make things work it is important that we make the most of the next six weeks, and the least of whatever difficulties might arise in that period, so that we can, in turn, make the most of all the devolved institutions when they return.
	The hon. Member for Aylesbury (Mr. Lidington) referred to some of the comparisons made in the newspapers between yesterday's meeting and, for example, the Rabin-Arafat meeting. There is a big difference. We do not have two leaders who are setting out on a voyage to try to discover arrangements and devise institutions. We already have agreed institutions, which were previously established and have proved themselves. All parties, whether they voted for them or not, could work well within them. We need to remember that, in the past, those institutions were brought down and destabilised, not because they could not function or suffered from structural problems and procedural and partisan tensions, but because of issues outside. We therefore have cause for more hope and a bit more confidence than some hon. Members suggest.
	I hope that the Bill, which has been introduced in emergency mode, is the last Northern Ireland emergency measure that the House has to tackle. We know that we cannot have 100 per cent. confidence in that, but I do not want to join the hon. Member for Montgomeryshire (Lembit pik) in spreading too much doubt about 8 May. We would do better to leave that aside and concentrate on all the other issues about which we want to create certainty and build confidence.
	The developments of recent days have vindicated those of us who always believed in power sharing and consistently believed in the Good Friday agreement. In the aftermath of the agreement, some of us argued that the institutions would allow people to sit down in partnership and co-operationnot only Unionists and nationalists, loyalists and republicans, but those who voted yes and those who voted no. Again, some people doubted that. Yesterday's events help prove that those of us who argued for that were correct.
	Yesterday vindicates not only those of us who stood by the agreement but those of us who helped negotiate it and made specific choices during the negotiations. It vindicates those of us who resisted the pressures from, among others, the Prime Minister and George Mitchell, not to go for an Executive model of power sharing, to duck deciding whether there would be Ministers and an Executive and to abandon the principle of inclusion. We insisted on the principle of inclusion because we wanted to ensure that, when the agreement came to be endorsed nobody would have the excuse for voting against it, because that would have created a form of government that included some parties and excluded others. We therefore succeeded in maximising the endorsement in the referendum, but we also wanted to ensure that even those who voted against the agreement would not, by virtue of that, be excluded from its institutions but could participate in them to the extent that they saw fit. We saw that as part of the healing process and as a means of breaking down barriers. Again, that judgment has been vindicated by the progress that we have made. Although changes have been made to some of the decision-making mechanisms under the agreement, the broad architecture remains essentially the same and I believe that we can make things work.
	I want to make it clear that when the right hon. Member for North Antrim and the hon. Member for Mid-Ulster (Mr. McGuinness) take up their responsibilities as joint First Ministers, they can enter that office free from the sort of harassment and hassle to which parties that previously took that course were subjected. I want to assure them that as they undertake work, not in the interests of their parties butin that office and working with others in the Executiveon behalf of the entire public, they will have my party's understanding, good will and, every time it is deserved or necessary, our support. That is the only way in which we can take matters forward. I am no less a believer in the institutions of the agreement just because my party is weaker in them than it was. The level of our party support has not determined our judgment.
	In yesterday's statements by the leader of the DUP and the president of Sinn Feinand in some of the remarks made todaypeople have rightly referred to the past. As on other occasions when there is much talk in the media of progress and a lot of hype and spin, victims are left with very mixed feelings, as the Secretary of State has rightly said. There is an added twist of futility that adds to the hurt that they have carried when they see people settling for power-sharing institutions, which Sinn Fein previously denounced so many times as equivalent to surrender and a sell-out. Even in the weeks running up to the Good Friday agreement, Sinn Fein was saying, No return to Stormont, and was insisting that because we were canvassing models for power-sharing institutions in the north and structures for north-south co-operation, the SDLP was a neo-Unionist party.
	Similarly, the DUP and others within Unionism totally opposed power sharing and set their face against any attempts at it in the past. When people see parties that then rejected those concepts settling for and embracing them now, they have to wonder whether we needed to go through the suffering, the hurt, the political stalemate, the stagnation and the divisions that we went throughand the answer is that we did not.
	In recent times in this processperhaps because of our tolerance, patience and generositymy party has lost seats, but I can live much more comfortably with lost seats than with what other parties have to live with: lost years, lost opportunities and lost lives. We could have been and we should have been where we are now far sooner. If it is our destiny now, it was always our destiny. If it is the only way forward now in circumstances of peace, then surely it was the only way forward in circumstances of difficulty, division, violence and ongoing suffering.
	I also want to join the Secretary of State in offering thanks to his predecessors in that office and, of course, to the Prime Ministerand, indeed, the previous Prime Minister, who contributed so much in unlikely circumstances to the process. The Secretary of State knows that we have been frustrated many times about how the process was handled, and we believe that if the Government had been firmer and fairer in the earlier years after the agreement, we would have got further faster. A certain destabilisation of the institutions was allowed and was toleratedat the expense, we believe, of the long-term process.
	The Government could have shown better authority in the immediate years after the agreement by making two things clear: first, that decommissioning was absolutely a requirement of the Good Friday agreement and had to happen by May 2000; and, secondly, that decommissioning was not a precondition of the establishment of the institutions. If the Government had shown good authority on those two basic points, we would not have had the running instability that led to delays in establishing the institutions and then the various suspensions and subsequent difficulties.
	I do not want to pretend in the warm glow of expectation that we now feel that those frustrations and criticisms are not still felt, but we have to recogniseand the House has to recognisethat were it not for the Prime Minister, there would not have been a Good Friday agreement. We ensured that it was a better agreement than perhaps he suggested in the faxes that he sent us in the weeks before its negotiation, but if it were not for him and his ministerial colleagues, I do not believe that we would have had the agreement. I believe that we could have had a better agreement, and more from it sooner, if different approaches had been followed, but the agreement is still there and we are essentially returning to it. It is a case of back to the future on 8 May.
	An observation was made in the American contextthat irony in politics is just hypocrisy with panache. There were ironies in some of what went on yesterday, and, to give credit where it is due, there was certainly panache as well. I will leave it at that. What we have to do now is make the most of the opportunity and the responsibilityand a real sense of responsibility certainly came through yesterday. We want to take things forward: we have to refit our economy, rebuild and renew our public services and completely upgrade our infrastructure. I believe that all the parties will set their faces to that tasknot just in the work with the Chancellor, but in the decisions and choices that will be made, some of which, when devolution returns, will be hard. Then we will move from divided grievances to shared government, and complete the journey from paying the price for growing apart to reaping the rewards of growing together in both the north and the south. As we do that, we will build a new country and a new society, and we will restore faith in politicsa new belief. Northern Ireland will be known for positive things. We will start to appear at the right end of the league tables rather than always being at the wrong end. We will no longer be a byword for instability, stagnation, political difficulty and political crisis. This generation will have the chance to write its own history in a very positive light.
	I welcome the fact that people have belatedly embraced the point that the only way forward is power sharing and inclusion. We can put up with six weeks. Although I sympathise with some of what the hon. Member for North Down (Lady Hermon) has said, the Secretary of State would not have been in a strong position if he had come here today and said, I have kept my word, but I have lost my marbles. We know what the deadline was forit was to ensure an outcomeand I hope and believe that we have that outcome, so let us get on with it.

Patrick Cormack: We can all agree with the last words of the hon. Member for Foyle (Mark Durkan).
	I have gently chided the Secretary of State about the deadline, and he knows that I would rather that it had been slightly more elasticfor example, it could have been the end of April. However, we are here today because he was insistent. I do not want to be churlishthis is not a time for churlish speeches; this is a time for hope and determination. I pay tribute to the Secretary of State, with whom I have always been able to talk confidentially and properly about events in Northern Ireland. In my experience, he has never betrayed a confidence. He has not always done the things that I would have liked him to do, but he has always been determined to see the day that we now see. I pay tribute to him and to the Prime Minister. As my hon. Friend the Member for Aylesbury (Mr. Lidington) said in a splendid speech from the Front Bench, we would not be here today without the Prime Minister. I also pay tribute to John Major, because the personal chemistry between John Major and Albert Reynolds helped to get the show on the road. There are many people whom we can thank, such as previous Secretaries of State and previous Prime MinistersBaroness Thatcher played her partbut this is a day for Northern Ireland.
	I pay particular tribute to the right hon. Member for North Antrim (Rev. Ian Paisley), the First Minister designate who will soon be First Minister. I hope that he will have many years in office and that he will be able to lead, with the other parties at his side, the people of Northern Ireland to a brighter future. The best memorial that the right hon. Gentleman could have will be the pulling down of those strangely called peace walls in Belfast and Londonderry. If he can lead the people of Northern Ireland towards that consummation devoutly to be wished, then he will earn the undying gratitude of the people of the Province of Northern Ireland.
	I wish the right hon. Gentleman well. He spoke with real statesmanship today, as he did yesterday. I remember sitting on the Government Benches in the summer of 1970, when we came to this House as new Members. I literally sat under him, and I almost had to send for earplugs, so resonant was the voice. In a spirit of charity and friendship, I say to him that he has moved a long way since then. He is now the elder statesman of Northern Ireland politics, and so much depends on him. We wish him and all the others, including, although it sticks a little to say it, the hon. Member for Belfast, West (Mr. Adams) and his colleagues, well.
	I entirely approve of what the right hon. Member for North Antrim said about the handshake. A handshake is a gesture, and there is always a time for gesture, but what he and the hon. Member for Belfast, West must do is work together. They come from different backgrounds and have different legacies, but if they can work together alongside the other political parties in Northern Irelandthe Ulster Unionist party and the SDLP, for which I have a lot of timethere will indeed be true hope, and a real chance of taking Northern Ireland to a condition of real normality alongside the other parts of the United Kingdom.
	The right hon. Member for North Antrim is, understandably, a great one for biblical texts, and one thinks of beating spears into ploughshares and lions lying down with lambs, although he is certainly not a lamb. One also thinks of another First Minister, although differently designated, who stood on the steps of a certain house and read the prayer of St. Francis. We all need to remember the context of that prayer, because it applies to Northern Ireland. We need a time of determination and a time without bitterness, which is the most corrosive of all emotions. There is plenty that one can be bitter about: there are those in Northern Ireland who have lost loved ones and suffered, and we have discussed that many times in the House. Like the hon. Member for Foyle (Mark Durkan), I wish that we had reached this stage a few years ago, but we are here now, and we must therefore look forward.
	Most of all, we must not be euphoric, as my hon. Friend the Member for Aylesbury said. This is a time for determination, and a time when we must hold in our heartsand if we so believe, in our prayersall those who are working for the good of Northern Ireland. We must recognise that the road ahead will not be easy. There will be moments of verbal conflict and raging rows, when people will feel like throwing in the towel, slamming doors and walking out. I say to the right hon. Member for North Antrim and to all my colleagues in Northern Ireland that the temptations to turn their back must not be succumbed to. The greater good of the greater number must be recognised as the goal for all. It matters not whether a man or woman's background is Protestant or Catholic, or which part of Northern Ireland they come from. Each one is individually important, and each one must be able to look to the power-sharing Executive as representing them, irrespective of their own political views and prejudices, of which we all have both.
	There is a yearning in Northern Ireland for true peace and normality. I have had the good fortune to chair the Select Committee on Northern Ireland Affairs for almost the past two years. When we conducted our inquiry into organised crime, we saw the black side. When we conducted our inquiry into tourism, we saw the bright side. We toured Northern Ireland, and saw what an incomparably beautiful part of the United Kingdom and the island of Ireland it is. The people who live there deserveno less than the people who live in England, Scotland, Wales or the Republic a bright future. It is my earnest hope that they will have a brighter future now.
	We look to the right hon. Member for North Antrim and all his colleagues from all parties to help to deliver that bright future. We in the United Kingdom have a moral responsibility to do all that we can to assist. The Government have a real role. It must be possible for the people of Northern Ireland to determine the future of their education system, as they want it. It must be possible for the people of Northern Ireland to decide how the vexed question of water charges will be worked out. If we truly believe in devolution and in giving responsibility, we must give responsibility to those who have now shown themselves to be willing, and big enough, to take it. When that is done, that part of the United Kingdom will truly be as normal as the rest of it.
	I again offer my congratulations to all who have brought us to the point that we have now reached, but most of all I offer my good wishes to those who will lead us into tomorrow.

Mike Hall: I add my congratulations to those of other Members for everyone who was involved in the discussions that led to yesterday's historic agreement at St. Andrews, so that we are now passing emergency legislation to ensure that we consolidate the peace process in Northern Ireland.
	My interest in Northern Ireland dates back to when I was first elected to this House. Members will recall that in March 1993 the IRA tried to blow up gas holders in Winwick road in Warrington. That is my home town, and I was Member of Parliament for Warrington, South. Fortunately, the IRA failed on that occasion. I would not like to speculate on how many casualties there would have been if it had succeeded. Sadly, two weeks later on 21 Marchthe day after mothers' daythe IRA set off two bombs in Bridge street in Warrington. They immediately killed a young boy called Johnathan Ball, and on 25 March Tim Parry's ventilator was switched off after he had been injured by the explosions in Bridge street.
	Wendy and Colin Parry are very close friends of mine. They have made a unique contribution to the Northern Ireland peace process. They never dwell on the past and on the tragic death of their son. I should add, for the record, that Bronwyn Vickers, who was also injured in the explosion, died some time later. Colin and Wendy Parry never look back. They always look forward and they have striven to contribute to the peace process in Northern Ireland. Through the Tim Parry Johnathan Ball peace centre in Warrington, they have established and developed links with the communities in Northern Ireland and the Irish Republic and attempted to take forward the reconciliation process.
	Colin Parry said today that he invited the Member for Mid-Ulster (Mr. McGuinness) for dinner at the peace centre in Warrington, but that he found it very difficult to sit opposite Martin McGuinness and to eat food with him. However, he also said that if it was possible for him to do that, it should be possible for the right hon. Member for North Antrim (Rev. Ian Paisley) and the Member for Belfast, West (Mr. Adams) to sit down and play their part in taking forward the peace process in Northern Ireland. He congratulates them both on reaching yesterday's historic agreement.
	My hope for the peace process is that the next six weeks are used positively, that we reach the deadline of 8 May and that power sharing once again takes place in Northern Ireland, so that we can use that and build on the foundations of the peace process that were laid by John Major in a previous Government, and then taken forward by our Prime Minister and by those on all sides of the divides in Northern Ireland who have sought to reconcile their differences. I hope that we consolidate the peace process. To borrow Colin Parry's words, if that happens, the death of his son Timothy and the death of Johnathan Ball will not have been in vain.

Peter Robinson: There is one certainty in politics: when there is an historic moment of progress and promise there will be at least two reactions, one of which is that persons and parties attempt to justify the positions that they have adopted, and the other is that there will be those who seek to ensure that no one forgets the role that they played in events. My right hon. Friend the Member for North Antrim (Rev. Ian Paisley) and other Democratic Unionist party Members of Parliament care nothing about those issues. The only important factor in any agreement that is reached is the benefit that it will bring to the people of Northern Ireland.
	In saying that, I take nothing away from all who have contributed, not least those who have been involved with us in negotiations since we became the largest political party in Northern Ireland in 2003, including the Prime Minister and the Secretary of State and all of their officials. It is proper that that is put on the record. We have spent many hours on this; I cannot imagine how many drafts of sections of legislation we have looked at. It has been a very long road.
	I want to make one point. I am toldI did not hear it myselfthat the suggestion was made that the Home Secretary had in some way intervened, and that the DUP had made some agreements with him behind the back of the Secretary of State. I have not been asked to make any remarks on this, so my word will, I hope, be all the more sincere and genuine. No such agreements were ever reached with the Home Secretary. He is one of those Cabinet Ministers who would never pass one in the corridor without having a wordI have often had to console him about the defeats of Glasgow Celticand he has an abiding interest in Northern Ireland matters. From time to time, of course, we talk about progress that is being made, but at no stage did the Home Secretary interfere in any way in the responsibilities of the Secretary of State. Lest there be any tension between the two Cabinet Ministers, let me put that on the record.
	I want to say something about the position of my party. The DUP reached a decision on its own. It decided what the consequences might be. It was not bullied into that position by anybody. No threats from the Secretary of State, the Prime Minister or anyone else would have altered the considered opinion of the DUP. We put our position forward to the Government publicly, as we have in the past, publicly, making it clear that this was what the DUP believed to be the right thing to do. I shall not remind people in any detail of the debate that we had on the Northern Ireland (St. Andrews Agreement) Act 2006 and the amendment that we put forward, which suggested that there should perhaps be some flexibility on the date of 26 March. If our amendment had been passed, we could have saved ourselves some time tonight and got on with the business of the Budget.
	The reality is that deadlines are much less important than agreements. Let us consider the reality for Northern Ireland if we had proceeded yesterday to set up an Executive without all the essential preparatory work that is required. We saw that in our meetings with the political parties yesterday, as we stacked up the issues that we had to deal with between now and May, with barely enough time between now and then to complete those preparatory tasks. It was abundantly clear that to do the job properly and to bring the community with us, we needed that additional time. The substance of what will happen in future will be much more robust because we have that additional time, irrespective of the deadlines.
	I have heard what the hon. Member for North Down (Lady Hermon) has said. She seems to be disappointed that agreement has been reached about the six weeks to a greater extent than she would have been if things had collapsed yesterday. That is sad and disappointing, and she needs to reconsider her position because it certainly is not the position held by her constituents. Indeed, with the same attitude, the leader of her party said yesterday, Isn't it a pityall this could have been done nine years ago. Of course it could not have been done nine years ago. Nine years ago, the IRA was still killing people. Nine years ago, it still held on to its illegal weapons. Nine years ago, it still continued with its paramilitary activity. Nine years ago, it still continued with its criminal activity. Nine years ago, it gave no support to the police, to the courts, to the rule of law. Nine years ago, there were no accountable structures under which we could operate. Nine years ago, legislation had not gone through this House ensuring a triple lock on the devolution of policing and justiceensuring that if ever a policing and justice Minister were put forward, he had to be somebody who could command the support of the Assembly.
	So, nine years ago this could not have been done. Indeed, nine years ago, without those things being done, some people did enter into government, and it was followed by suspensions, by crisis after crisis and, ultimately, by collapse. It will be no good to the people of Northern Ireland if we simply go for a deadline to get things moving. We need to get things right, and that was the slogan that this party adopted in the elections. However long it took, it was necessary to get things right.
	I will be honest with the House: there was no joy in the hearts of members of this party at having to take the step that we took yesterday. There are people on these Benches who have suffered considerably at the hands of Republicans. There are people on these Benches who have lost members of their familiessome many members of their families. There are people on these Benches whom the IRA has attempted to killand everyone on these Benches has had constituents butchered by the IRA. So there was no joy or enthusiasm in going forward in those circumstances.
	It was a difficult decision to take; no doubt it was too difficult for some. I understand that it will be too big a decision to bear for some in the Democratic Unionist party. I accept their decision. I wish that they continued to walk with us. I wish that they could continue to use their talents for the benefit of the community in the only way that they can properly do so now, given the party sizes and structures in Northern Ireland. I am sad that people will leave and I hope that in time they will see that the decision that we have taken has been vindicated, but I recognise that many will find it too long a step to take.
	There has been much history in Northern Ireland and the House has seen many events unfold over the years. The responsibility that we have, which was outlined by my party leader yesterday, was to ensure that no matter how great our own personal sadness about, or loathing of, all those events, we did not allow that sadness or loathing to become the stumbling block to ensuring that there is peace and stability in the future.
	We have taken a decision based on our own judgment as to how we can move forward, but that is based entirely on all parties keeping the commitments that they have made, including an end to all paramilitary and criminal activity; to exclusively peaceful and democratic means; to the support of the police, the courts and the rule of law in every tangible way; and to demonstrate that in their daily lives and to encourage others to do so as well.
	We have given our commitment to enter into an Executive, and when the Democratic Unionist party gives its word, the Democratic Unionist party keeps its word. Therefore, we will move between now and 8 May to ensure that all of the necessary work is completed. In that respect, I say to the Secretary of State that when we were working in the transitional Assembly, in the Programme for Government Committee, the members of that committee sought details from the Departments about the present circumstances on several issues, but the answers were less than forthcoming. If we are to do our job properly in the preparatory period, the Secretary of State must give instructions to ensure an opening up of the inside details of each Department

Peter Hain: I welcome the hon. Gentleman's speech and the eloquence with which he makes his contribution. I wish to give him, from the Floor of the House, an absolute and categorical assurance that I discussed yesterday with the head of the civil service, Nigel Hamilton, exactly the terms that the hon. Gentleman asks, which have also been requested by other parties. We will make our officials available. Whether the parties choose to indicate which individuals might assume ministerial posts or just wish to put individuals forward, they will be able to have access to the Departments so that they may properly prepare for government without hindrance. They will be able to discuss with ministerial colleagues any joint decisions that might come up in the future, so that they are not taken unilaterally by the present Government, but with consensus on them from the incoming ministerial team.

Peter Robinson: I am very grateful to the Secretary of State, whose intervention will be welcomed by all the parties that will form the Executive. We trust that we can have the unusual relationship that he described in the weeks that lie aheadalthough I am not sure whether it means that we will be blamed for some of the decisions that will be taken in the next few weeks. However, it will be helpful to have a greater knowledge of the position in each of the Departments.
	I do not want to burst the bubble of enthusiasm in the House and outside it about the events that occurred yesterday. However, my right hon. Friend the Member for North Antrim said that there would not be a love-inI think that that was his termbut a work-in. Those who know the different backgrounds of the two lead parties in the Executive will recognise that there is a massive difference between them in their ideology and goals, and in how they see the political future of Northern Ireland.
	Gerry Adams once said that an Executive with Ian Paisley would be a battle a day. I was attacked during the recent elections for agreeing with him, but that does not mean that we will be thrust into conflict over every issue that arises, as all the parties will be able to agree on many of the matters that come up. However, nothing changed yesterday in Gerry Adams' desire to bring to an end the Union between Northern Ireland and Great Britain, and neither did anything happen to alter the determination of my right hon. Friend the Member for North Antrim that that link should be retained and strengthened. With two such constitutional opposites in an Executive, there is bound to be tension. If Gerry Adams really believes that there should be a united Ireland, that is what he will work towards. It will be the job of all Unionists in the Executive to ensure that Northern Ireland goes in exactly the opposite direction.
	I believe that Northern Ireland's best interests remain with the UK, and the DUP will continue to put that at the forefront of all its policies and strategy. I recognise that some do not share that view, but the big difference now is that the blood of people who disagree will not be spilled: instead, we can deal with such matters politically and allow the electorate to make their decisions in a democratic fashion.

Eddie McGrady: The hand of history seems to have touched the people of Northern Ireland once again and another historic day has been marked on the calendar. We have had many historic days and, depending on one's perspective, many times has the hand of history touched us on the shoulder, poked us in the back or walloped us in the ear.
	However, the generosity and all-encompassing nature of the statements made yesterdayand again today in this Chamber by people such as my hon. Friend the Member for Foyle (Mark Durkan), the right hon. Member for North Antrim (Rev. Ian Paisley) and the hon. Member for Belfast, East (Mr. Robinson)are a great ray of hope, both for me and for the people whom I have had the privilege to represent here for the past 20 years.
	In fact, my memory goes back even further. Despite my youthful appearance, I have been involved in this process for more than 40 years, as I was first elected in 1961almost half a century ago. In that time, the transition undergone by the people of Northern Ireland has been slow but remarkable. It may sound like a clich, but the reality is that they have had to cope with a legacy that is many centuries old. Today, the orange and the greenthe men of extreme violence and wordsare joining together to promise a future that will embrace all the people in Northern Ireland and the island of Ireland. That is a day that I have long sought and long hoped for, and sometimes even prayed for. The communities of Northern Ireland have suffered greatlyI need not repeat that there have been 3,000-plus deaths, 30,000 maimed, and many, many maimed mentally for life as well, and we are still suffering the consequences of an enormous suicide rate. The divided communities are still there, with high walls between them. It is a huge challenge to translate the good will and the getting together from the hierarchy of political parties into the ghettoes that, unfortunately, are still to be found in some parts of Northern Ireland.
	We need not be pessimistic, because the process is ongoing, and it has enabled this momentous occasion to take place. I knowI hopethat the agreement made yesterday between the two primary parties and the other parties will sustain us into a much more peaceful, tolerant and prosperous society than we have ever had in my lifetime. That is a huge dream to fulfil in many ways, and I hope that I will not be disappointed in any respect. I remember many years ago in the House when the first ceasefire was announced, and I know that we cannot expect a sudden switch-off of violence and attitudes of hatred. It will be a slow process and the new arrangements will be testedperhaps, unfortunately, on the streets on the Northern Ireland. I hope that that does not happen, but the political will of the major parties and all the parties in the Assembly will be hugely tested.
	While we have a Government primarily of two parties that were at the extremeshopefully, they have moved from that positionthere is a huge dichotomy in their policies. On 7 March, the people elected combatants rather than Governments, because never before in these islands or, indeed, in Europe, have people gone into an election where the Prime Minister has already been appointed from one party and the Deputy Prime Minister from another. The Governments, the media and everyone have encouraged people to involve themselves in what was a gladiatorial political contest. We have a resultand, yes, the people have spokenbut it was a contest of strength rather of policy.
	There is a huge dichotomy in most of the major areas of social and economic development in Northern Ireland. Water rates were used as a weapon by the Government to persuade people that they must move, but in fact, in my constituency, there is a firm belief that water rates were a red herring, as the Government did not have the capability to collect them from 1 April onwards. I am only too happy for those rates to be shelved and used as a carrot for the parties coming into power. They will be shelved for one year, and it is their problem thereafter. There is a huge question, too, about the review of public administration. Sinn Fein wants seven super-councils, and the other parties are roughly united on a figure between 11 and 15. That must be resolved because it directly affects every aspect of life in Northern Ireland, perhaps for the next two decades. In education, one of the major parties supports the concept of selection for secondary education, but other parties do not.
	Those huge differences have to be ironed out, hopefully before 8 Mayalthough that may not be possibleso that people who committed themselves to the new partnership have a vision of where they are going and so that their problems can be addressed. It has taken a long, long time to arrive at this point, and if it is the final resolution of our problem it truly is an historic day not only for the north of Ireland, but for Ireland and the UK. Indeed, our diaspora throughout the world is taking solace from what has happened in Northern Ireland; perhaps we can even apply some of the lessons in conflict resolution in other areas. That may be presumptuous, but we have some experience.
	I wish the parties involved every success. They will have our support. I want to put on the record my thanks to the Secretary of State, the Prime Minister, the British Government, the Taoiseach and the Irish Government for their unswerving commitment in trying sometimes to knock heads, sometimes to cajole, but more often to bribe. The bribery has been very effective.

Jeffrey M Donaldson: I welcome the opportunity to participate in the debate this afternoon. May I say how much we appreciate the words that have been spoken by many in the Chamber, including the remarks just made by the hon. Member for South Down (Mr. McGrady)? Whatever our differences across the Chamber, we recognise him as a man of honour who has made a positive contribution to politics in Northern Ireland. Although he is no longer a Member of the Chamber at Stormont, he still has a contribution to make and we thank him for his comments.
	What happened yesterday, difficult though it was for many, was a good day for Northern Ireland. It offers the prospect of a better future for all our people and, as my colleague and leader, my right hon. Friend the Member for North Antrim (Rev. Ian Paisley) said, what we are trying to dowhat we want to dois for the benefit of all the people in Northern Ireland. It would be easy simply to act in a sectional interest; it would be easy to do what the loudest voices might want us to do, but leadership is about making tough decisions and displaying courage and vision, and my right hon. Friend's comments yesterday demonstrate that he has done so in the best interests of the people of Northern Ireland.
	I am sure my right hon. Friend will not mind me saying that the Democratic Unionist party made a collective decision. Our party executive met on Saturday. We had a good, constructive debate and more than 90 per cent. of the membership of that body backed the resolution proposed by the party officers. I believe their view represents the view in the country. As I said earlier, we have received many messages from across the community and across Northern Ireland supporting the leadership of our party in what we have done.
	I am sure that there were people who were disappointed that government did not happen on 26 March, but the overwhelming majorityeven those who voted for parties that were committed to 26 Marchrecognise that it is better to get it right. That is what we stood for in the election. That was our campaign slogan, but it was more than a slogan, more than mere words, more than a faade. We mean it. We want to get this right. The people of Northern Ireland have seen too many false dawns. How many times have we been here before? How many times has there been the prospect of a breakthrough and delivery of the peace for which we hoped, only for those hopes to be dashed? We do not want to do that. We do not want to build up people's hopes only to see them falter and fall. That is why we want to get it right. We have worked hard to get it right and we are committed to getting it right.
	With respect, I say to the hon. Member for North Down (Lady Hermon): surely we have moved beyond the point of getting hung up on dates and allowing our disappointment to override our good judgment about what is best for the people of Northern Ireland?

Lady Hermon: May I remind the House that in the recent Assembly elections the Democratic Unionist party had only 30 per cent. of the vote on changing the deadline? However, DUP Members were not going to be calendar-lednot until today when they picked the date, and in fact we will be calendar-led, so they have changed that policy. More than 60 per cent. of the electorate voted for partiesincluding Sinn Feinon manifestos that committed all the parties to sit in Government yesterday and to be paid yesterday. If Assembly Members are not sitting in a devolved Assembly, people at home are entitled to know why they will be paid for the next six weeks. That question has been raised with me in Northern Ireland, so let us find out.

Jeffrey M Donaldson: The hon. Lady has missed the whole momentum and tenor of this debate. Her nit-picking and pettiness do her no good whatsoever. With the news that people will not be getting water charge bills through their door, that academic selection will remain in Northern Irelandthe good grammar schools in North Down will benefit from thatand that we are going to get a Government on 8 May, I do not believe that the people of North Down are sitting wondering whether it is right or wrong that their Assembly Members are getting paid. Those Members will now engage in preparatory work and will be working day and night, as we have been, and as the hon. Lady has not been, on this issue. We have been working long hourswell beyond midnight on many eveningstrying to resolve these issues and to make progress.
	I do not think that anyone in my constituency is going to question whether I earn the much-reduced salary that I and my colleagues on these Benchesas both Members of Parliament and Members of the Northern Ireland Assemblyreceive. Nor do I believe that the people who were elected in North Down will be any less worthy of the salaries that are paid to them, because we are preparing for the return to government. We are still a condition-led party.

Lady Hermon: Will the hon. Gentleman give way?

Jeffrey M Donaldson: The conditions need to be right. That is why we are continuing the discussions with the Government about the financial package and why we want to ensure that there are commitments on everyone's part to supporting the police and the rule of law. Our resolution makes that absolutely clear: no one must go back on the commitments that they have given. So conditions are still very important to us, but we believe that by 8 May the conditions will be right, and that is why we have taken this decision. I will give way.

Lady Hermon: That is very generous indeed of the hon. Gentleman. He has just exemplified the generosity of spirit and the great charm of the DUP that mean that I, and thousands like me, will never vote DUP.

Jeffrey M Donaldson: With the greatest respect to the hon. Lady, that is not the message that we are getting from traditional Ulster Unionist voters who have been contacting the Democratic Unionist party in the few hours since yesterday. With that kind of attitude, they will be switching their allegianceand have been doing so. If she looks at the voting figures in North Down, she will see that the Democratic Unionist party is now the largest party in her constituency. What does that say about her representation when it comes to the people in her constituency? If I was sitting in Lagan Valley and another party was taking over as the leading party, I would not attack that party and make churlish remarks like the ones she has just made. I would try to do something to ensure that this process works, because that is what the people of North Down want.

Ian Paisley: Is it not a fact that the election is over? The people have made a decision. The party of the hon. Member for North Down (Lady Hermon) did not want an election. It fired its arrows into my heart and said, Imagine him daring to ask for an election. I asked for the election. I felt that all the people of Northern Ireland had the right to say what they said. They did not say it in the way that she wanted it said, but the election is over. We have to go forward to fulfil the obligations that are put upon us by what the electorate said.

Jeffrey M Donaldson: I thank my right hon. Friend for that intervention. He is absolutely right. I believe that the hon. Member for North Down will be eating her words, because the DUP has been consistently increasing its support. One of the reasons why I left the Ulster Unionist party was that it has become so embittered towards fellow Unionists and so tied up in its inward-looking attitude that it cannot see the wood for the trees. I think that traditional Unionists will be glad of what happened yesterday, as are all hon. Members, with the exception of the hon. Member for North Down. She might reflect on why she is alone on this Bench as the only Ulster Unionist Member and wonder whether the attitude that she is displaying today is part of the reason for that.
	It is time to look forward. I welcome the Bill because it offers the prospect of real progress. However, I also realise that some people have difficulties with the measure. This morning's edition of the Belfast  News Letter includes comments made by William Harpur, a disabled former police officer who survived four IRA attempts on his life. He is unhappy with what has occurred. I respect Mr. Harpur's opinion and understand where he is coming from. However, I say to him and many others like him that the reason why we want to build the new future for Northern Ireland is so that no other policeman has to be the subject of terrorist attack and so that there is a genuine end to terrorism.
	The date of 12 August 1970 is etched on my mind because it was the day on which the politics of Northern Ireland first came into my life, with the murder of Samuel Donaldson, the first Royal Ulster Constabulary officer to be murdered by the IRA in the troubles. He was my cousin. I can well remember the day that my uncle came to our front door to deliver the news of his death at a place called Crossmaglen in south Armagh. I am glad that we have the prospect that his death and the others that have occurred in Northern Ireland might be the last of the deaths of gallant officers who have stood at the front line to serve and protect the community of Northern Ireland. If the price that I have to pay to ensure that that happens is to swallow hard, look to the future and perhaps face difficult and challenging decisions, I am prepared to pay it, and so are my colleagues. We want to be sure that when people say that they support the police, they actually do support the police, and that when they say that they want to uphold the rule of law, that is precisely what they do. We have taken the extra timenot just the six weeks, but the time since 24 November, when we had the last deadlinebecause we want to get this right. That is important for everyone in Northern Ireland.
	In six years, people will look back at these events. Will those people who feel that an extra six weeks is too high a price to pay really remember those six weeks if we get economic stability in Northern Ireland after years of underinvestment, neglect and the troubles, when our economy has been put under enormous pressure? If we have a peaceful society, will they reflect that it was not worth taking the extra six weeks so that we could secure that future for them and our children? I do not believe that they will. I do not think that anyone will remember much about 26 March as a deadline. They will remember it as a day that offered hope for the future.
	As my right hon. Friend the Member for North Antrim and my hon. Friend the Member for Belfast, East (Mr. Robinson) said, we recognise that the road ahead will not be easy. There are many difficulties and challenges to overcome. There are battles ahead, but at least we have the hope that the differences between us in Northern Ireland will be resolved by peaceful means alone, not by resorting to violence. That is what we have fought for and it is the position in which we have always wanted to be. As the hon. Member for Foyle (Mark Durkan) commented, we could say that this might have happened several years ago. Perhaps things could have happened sooner, but, unfortunately, the men of violence have taken so long to make the transition that it has taken until now to achieve what we hope is being achieved.
	I look to the future with hope, but I recognise that there is still pain in our community. As my right hon. Friend the Member for North Antrim said yesterday at the Parliament building, Stormont, we do not forget those who have lost and the victims who still carry the pain, the hurt and, like Mr. Harpur, the disabilities that are the result of our conflict and the violence. We will not forget those people. They will receive support and the recognition that they deserve. They will not be left behind. We need to bring them with us into the future, just as we need to bring everyone in Northern Ireland with us into the future. That will not be easy. There are people on both sides who have doubtsand why would not they have doubts, after so many years of false dawns and dashed hopes? However, perhaps this time there is a real prospect of moving forward. This House and Parliament have a role to play.
	Today, I am proud to be a Member of the Parliament of the United Kingdom, because I believe that my place in the Union is secure. I believe that Northern Ireland has come through the troubles and the worst of times, and has emerged, although perhaps not as a better place. However, we have learned, and I hope that we have learned enough to know that violence is not the way to resolve our differences. Parliament can continue to make a real contribution. Later this evening, we will wind up the debate on the Budget, and as well as looking to the Northern Ireland Office to help us on our way forward with the administrative arrangements, we look to the Treasury to help us with the financial arrangements, but we are not holding out a begging bowl. Our objective is to rebuild our economy so that we can pay our way in the United Kingdom, because we are a proud people, and we do not want to be dependent on others. We want an economy that enables us to be fully part of the UK, and we want to be capable of securing our place by paying our way and playing our full role in this United Kingdom.

David Anderson: A lot of people present in the Chamber have come a long way to get where we are today. I was just thinking about some of the things that I have gone through since I first got involved in Northern Ireland politics. In 1988, a group of 11 parents came across to north-east England to tell us about the children whom they had lost because of plastic bullets. We went with them to Brock's fireworks factory in Sanquhar in south-west Scotland, where the plastic bullets were made. They were pilloried by local people for going there and for asking, Will you please stop making these weapons, because they are killing our children? It was a salutary lesson for me about man's inhumanity to man, and particularly about inhumanity towards young people.
	Later that same year, I attended a demonstration in Glasgow to speak against the restrictions on freedom of speech that had been imposed on Sinn Fein. It was not that I necessarily approved of what Sinn Fein was doing, but I disapproved of silencing people, as that is the wrong thing to do. Again, we were met with howls of protest, and the demonstrators faced real and present danger in the streets of Glasgow. Thankfully, we have come a long way since then, but even so, there have been milestones and setbacks.
	In the early 1990s, I was involved with a group called the Agreed Ireland Forum. Its members, who were from virtually every part of Irish society, first came across to this country for a meeting, and then went back to hold meetings in Ireland to try to take things forward. I was pleased to be able to organise a conference in Newcastle, County Down, just a few days after the bombing of Canary Wharf. People from every political party in Northern Ireland bar oneunfortunately, it was the Democratic Unionist partycame to that meeting, as well as people from the ethnic minorities, a growing group whose needs must be taken care of in the new Northern Ireland. The meeting was opened by the President of the Republic of Ireland; that was a very strong statement, all those years ago. It said, Yes, we can work together.
	In an intervention on the Secretary of State, I mentioned the work of the trade unions. I am proud of the fact that I worked with trade unions in Northern Ireland that tried to ensure normalcy when their members were working in chaos. Their members were threatened every day by people trying to jump queues and abuse public servants and public services. I was convinced and guided by people on both sides, including a branch secretary at a hospital in Belfast, who had served time as a young man for robbing banks to fund the loyalist cause, and civil rights marchers on the Republican side who have carried the flame from the 1960s to the 1990s and beyond, to try to develop peace in Northern Ireland. I was attacked by so-called London Irish representatives of my own union, who said that we should not even be organising in Northern Ireland, despite the fact that we were by far the largest trade union in Northern Ireland, and despite the fact that 30,000 people wanted to be members of my union. I am very glad that we ignored those voices.
	We developed structures that crossed sectarian barriers and we said, If it's wrong, it's wrong. It doesn't matter where you went to school. It doesn't matter where you go to church. It doesn't matter what your name is. If you're being treated badly, the union will stand up and oppose that. I probably had more problems in the trade union movement with people arguing among themselves than we had in arguments about the country's politics.
	I supported the work of my Government and of my party before it got into government. My union was responsible for funding much of the work that Mo Mowlam did before she went in as Secretary of State. That meant that as a Minister she was able to confront civil servants and wipe them out of the way, so that she could sit down and talk directly with the politicians on the ground who were developing a way forward that was not blocked by the stagnant, cold hand of the civil service in Northern Ireland.
	In the short time before April 1998, that helped to move forward the Good Friday agreement. When it was up and running, yes, the first Assembly sat for only 72 days, but in that short time the work of people like the hon. Member for Foyle (Mark Durkan) showed that despite the opposition from outside the Assembly, there was a chance to make progress. People did get together and work positively. After suspension, the Assembly returned. All the arguments and problems were described earlier by the hon. Member for Belfast, East (Mr. Robinson). We went from crisis to crisis to collapse.
	There has been much talk today about deadlines. I wish I had a pound for every deadline that has been set and broken. The real worry in the past was that when a deadline failed, a vacuum followed. The history of Northern Ireland is that if a political vacuum occurred, the terrorists filled it. I wish the deadline had not passed yesterday, but there is no vacuum. Instead, people are working their socks off to try and pull things together and make the agreement work. That is a massive change.
	Since I entered the House two years ago, there have been enormous frustrations. We have sat down and worked together for hours, and it has been pointless, going forwards, then backwards. We sat for 27 hours on one Bill. The Secretary of State had to come to the House and acknowledge that it was not working. He had egg on his face that day, as well as yesterday. That was frustrating for those who wanted to see the process move forward.
	While people in the political world in the House and in Northern Ireland have to some extent been talking to each other, in Northern Ireland the people's world has moved forward massively. It is unrecognisable, compared with what it was 10, 20 or 30 years ago. In every sense it is a much better place, and we should all be proud of that. The Northern Ireland Assembly is to be led by probably the two most polarised parties anywhere in Europe, if not the world, and there will be ideological problems, but in a democracy that must be accepted.
	Since I entered the House, I have worked closely with the hon. Member for South Staffordshire (Sir Patrick Cormack) on the Northern Ireland Affairs Committee. Twenty years ago I was ideologically opposed to his Government, and I still am. As a miner, I was ideologically opposed to what his party was trying to do to my community. That has not stopped us, along with other Members with similar experiences, working together for the betterment of the people whom we represent and for the people of Northern Ireland. That demonstrates the possibilities for the people who will take up responsibility.
	We now have a date for restoration. The positive things that were said yesterday not only by the DUP, but by Sinn Fein, about being serious and making the agreement work, have set an agenda. Collapse is no longer an option. Yes, there will be crises. That is part and parcel of the democratic process, but walking out, deliberately undermining the process because one group cannot get their own way, is not on. That would be a betrayal of the people whom they represent, of the House and of the trust that the House has placed in them. It would also betray the people of Great Britain, who for 40 years have supported the people of Northern Ireland in every sense and want to continue to do so. I take on board what was said earlierthat nobody in Northern Ireland wants to be the recipient of handouts. I accept that totally, because I know what proud people they are. The fact is, however, that what has happened over the past 40 years has caused economic disadvantage to Great Britain, and that when we get rid of that disadvantage it will be to the benefit of us all.
	We will betray the futures of our children and our children's children if we do not make the system work this time. I am not nave. I know that it will not be easy, and I know that this is very much a beginning and not an end. Democracy is not easy; it is much easier to move in the other direction. But I plead with all who will run the Assembly in Northern Ireland not to abuse the chance that they have been given.

Ben Wallace: It is interesting to follow the hon. Member for Blaydon (Mr. Anderson). I am sure that throughout my time in the 1980s and 1990s our views on the position in Northern Ireland would have been diametrically opposed, but we certainly agree today.
	I was an Army intelligence officer in Northern Ireland in 1994. I therefore had a unique insight not only into the thinking of the Government of the day and the efforts that they were making towards peace, but into what was going on inside the terrorist organisations. It is right to pay tribute at this time to the men and women of the Royal Ulster Constabulary's special branch, the military and the security services, who not only worked to achieve justice and catch criminals and terrorists, but had worked towards peace for many years before the 1994 ceasefire. They continue to work towards peace, whatever their titles are today, because we always worked not just to catch members of the IRA or the loyalist paramilitaries but to achieve a settlement.
	Ministers will be aware, although they may not be allowed to say it in a public forum, of the work that has taken place, and is taking place today, to ensure that the Government of the United Kingdom are in the best position to use information to achieve peace. There was no great conspiracy to make war and continue conflict; the conspiracy was only to achieve a good resolution for peace.
	I must give some credit to a man to whom it is not easy for me to give credit. I must give credit to Gerry Adams, and to Sinn Fein. I know from experience, from members of Gerry Adams's organisation and indeed from the IRA, how much horror and murder was inflicted by some of those individuals, but I must give Gerry Adams credit for what he has achieved in persuading a terrorist organisation to come to the table to talk and, moreover, commit itself not just to a ceasefire but, apparently, to a permanent ceasefire. The constitution of the IRA army council has always denied any form of peace. It was a military organisation, and what Gerry Adams has achieved deserves some credit in this arena.
	I can say that because I have had many experiences of Gerry Adams's organisation, none of them jolly. Indeed, I think I remember arresting his cousin at some stage, or possibly his nephew. I have not met him in the House to ask him which it was, but I do know that we are here today partly because of that organisation's actions. I can say that in memory of people such as Tim Parry and others who lost their lives on this side of the argument.
	More importantly, I want to pay tribute to the right hon. Member for North Antrim (Rev. Ian Paisley) and the DUP. Throughout the process people were keen to say, Appease, concede, give in, make the gesture, go for peace, and every time it was said the right hon. Gentleman responded, Not until we achieve the best deal for our constituents, our electorate: not until we are sure that these people mean peace. Actions speak louder than words in Northern Ireland. They always have, to Ulstermen. Those who forget that may find themselves in the position of the Secretary of State today. I believe that the slipping of the deadline was probably nothing more than an Ulsterman's wish to have the last word. That is very much the way of Ulster. The Secretary of State may have thought that he was in charge of all the blackmail and the bullying, but in the end the Ulstermen will tell him when they want to start the process. So I pay tribute to the DUP, which stuck to its guns.
	I never agreed with all that the DUP said in my time. I remember stopping the right hon. Member for North Antrim one day; he was not a Member of Parliament at the time. It was a Sunday, so he would not speak to me, a member of the security forces. He was on his way to do God's bidding. When I saw the press trying to interview the party leader on yesterday's television news, I knew that nothing would be said on God's day. The right hon. Gentleman has stuck to his guns, and I believe that without that, Sinn Fein would never have recognised the Police Service of Northern Ireland or worked with the forces of law and order. No doubt it will be tested by the DUP in the Assembly, to establish that its words mean actions.
	We should not, however, forget the efforts of the United Kingdom Government under this Prime Minister and those of a number of previous Conservative Governments to ensure that we achieved what we have achieved today: a peace process with, hopefully, a conclusion. Last March I went to Northern Ireland and stayed in Headquarters Northern Ireland. I remember it as a pulsating citadel of the power of the United Kingdom, under threat sometimes, and sending men and women out to risk their livesbut it was a ghost town. Much of it was empty: many of the places that I recalled having purpose and function no longer existed, because there was no longer any purpose or function.
	I went to visit my old bases, but I could not do so because they are now housing estates. In Cookstown there are a number of houses and no base, which is ironic because it was in Cookstown, in 1994, at the time of the first ceasefire, that I made the decision to close two vehicle checkpoints for a couple of hours. That was interesting, because the habit among the population of that town was to stop at the checkpoints; they were not used to being able to drive on. As a result there was a traffic jam, although no soldiers were present.
	I think that others are sometimes quicker to kick the habit of violence and recrimination than our politicians are. During my visit last Easter, I rang for a taxi from Headquarters Northern Ireland. I asked in the guardroom how I could book an approved taxi. In my day, to risk a taxi that had been booked by telephone might be to take one's life in one's hands, if the taxi had been booked from the wrong part of town. I was told, There is no approved list. Just dial a number. I dialled a number, a taxi duly appeared at the gates of Headquarters Northern IrelandI was not used to that eitherand I was driven to the centre of the city.
	I did not look at the driver's tattoos, terrified lest I catch sight of the Red Hand of Ulster, God Loves the UVF, a tricolour or IRA on his arms. Instead, I engaged him in conversation about what he thought of the current peace deal, or peace process. He did not mindhe wanted it to happenbut he was most aggrieved by the fact that politicians were receiving allowances for doing nothing. If anything could have told me that normality was arriving in Northern Ireland, it was that. It sent a signal that the  Daily Mail might have a circulation in Northern Ireland in futurethat people were obsessed with, and angry about, the fact that politicians were wasting time rather than dealing with the issues of the day.
	There is a challenge for the Assembly. As a former Member of the Scottish Parliament, I have seen devolution in action, and I am not opposed to it. I have also seen nationalists in action, on a far better footing than I have in Ulster. The challenge for the Assembly and the Assembly parties is not to become bogged down in petty squabbling. If on day one the parties in Northern Ireland become involved in discussing whether they should have green, orange or blue tablecloths, or whether there should be lilies in the hall of Stormont, they will betray not only themselves but the electorate who sent them there.
	When at a time of peaceful politics the nationalists' agenda is to exploit such difficultiessuch tiny, petty differencesfor their own ends, my advice will be to ignore it. The best way in which to counter nationalist pettiness is to say, You can argue about whether the cross of St. Andrew or the Union flag should go on top of a Government building all day long, but it will not give people a better health service, a better education or a better transport system. That type of real politics usually puts the nationalists down. I advise people not to play into the nationalists' hands if that is what they set out to doand I am sure everyone knows from what happened the first time that that is exactly what some of them set out to do. I say, Be better and bigger than that, and I believe that the electorate of Ulster will, in the end, reward you for it.
	The role of the Northern Ireland Office must change. With devolution a success, it must give up the bullying and the blackmail that has sometimes characterised trying to get the Ulstermen to the table. It needs to become the strong voice of Ulster in Westminster, not Westminster's voice in Ulster. It needs to be at the top table of the Cabinet and to say, We need a fairer corporation tax so that Northern Ireland can compete better with the south of Ireland. If it is the champion of Ulster in the constitutional environment of Downing street and the House of Commons, the electorate will again be less tempted to move towards a nationalist agenda. If it does that, the symbol that we are all chasinga handshakewill become a reality, Stormont will become a lasting, successful settlement, and in the end peace will be achieved. Then the electorate, who have throughout this put up with death, murder and threats, will be able to focus on what is really important in Northern Irelandeducation, health, industry, business and a future for the Province, which, as a Unionist, I hope will remain in the United Kingdom.

Roberta Blackman-Woods: I am grateful for the opportunity to participate briefly in this debate.
	I want to start by congratulating the Prime Minister on his dogged determination in sticking with the peace process in Northern Ireland, and the Secretary of State on the sensitive way in which he has applied himself to resolving some of the outstanding difficulties in Northern Ireland. However, I would say to the Secretary of State and his ministerial team that they might still have some way to go in explaining to the younger generation how we ended up with the meeting that took place yesterday. My teenage daughter, who was born in Northern Ireland, wanted to know why, if all it took to get devolution in Northern Ireland was to threaten to send out water rates bills, it had not been done many years ago.
	Of course, we all know that it is much more difficult and complex than that. That is why I pay my main tributes to the right hon. Member for North Antrim (Rev. Ian Paisley) and to the hon. Member for Belfast, West (Mr. Adams) for the truly extraordinary meeting that happened yesterday. I congratulate them not only because the meeting took placeit was certainly an historic event in itselfbut because of the measured and careful language that they used in the statement that was given to the press. Great care was taken to acknowledge each other's histories and the positions that they had come from. I very much pay tribute to them for doing that, because it gave all of us, particularly those of us who grew up in Northern Ireland and were used to hearing very different language, hope that things might be different, and better, in future. I suspect that when the Assembly is up and running, comments will not always be so measured. However, it is good that the difficulties of Northern Ireland will be played out across a chamber, with disputes settled through political discourse, not through violence on the streets of Northern Ireland. That is what we all hope will happen.
	As a frequent visitor to Northern Ireland to see my family and friends, I know that there is enormous thirst, particularly among the younger generation, for things to change there. They want real leadership from their politicians, and they saw that yesterday. They want to grow up in a country where decisions about Northern Ireland are made in Northern Ireland, particularly about bread and butter issues.
	Perhaps more than most people here, I am aware of the difficult road that Members in all parts of the Chamber have travelled to get to yesterday's meeting. Most of us in Northern Ireland have lost relatives and friends. It is very hard to put that anxiety and grief behind us and move forward, but we all know that it has to be done if Northern Ireland is to have the prosperous and peaceful future that we all want to see. Again, I pay tribute to the right hon. Member for North Antrim and to the hon. Member for Belfast, West, because theirs is an extraordinary journey. I hope that they bring other people with them on that journey so that people in Northern Ireland can have their devolved Assembly and a peaceful future.

Nicholas Winterton: The hon. Lady is making a very gracious speech and adding a great deal to the debate, much of which I have had to watch from my office. Will she support me in saying that a major contributor has been the right hon. Member for North Antrim, who, through his leadership, consistency and courage, has led a majority of the population of Northern Ireland to support him and his party in this agreement?

Roberta Blackman-Woods: I do indeed agree with those comments. I have already paid tribute to the right hon. Member for North Antrim, but we must also recognise what an enormous journey it is for the hon. Member for Belfast, West, who has contributed a great deal to the peace process as well.
	I hope that the next six weeks are used constructively to get positive feedback from the people of Northern Ireland about how they would like the Assembly to be constructed. I wish Members every success in that endeavour.

William McCrea: Members come to this debate with many different emotions and feelings. Some are full of elation and praise. There was once a song about Barry McGuigan called, Thank you very much Mr. Eastwood, because he was always thanking people. Some are full of excitement because of the possibility of devolution in the month of May. There is a wide breadth of opinion in any political party. A party is always stronger, and democracy is always stronger, for that. I am exactly who I am; I am not going to be somebody else. That sometimes pleases and sometimes does not.
	I came to this House way back in 1983, representing the constituency of Mid Ulster. The hon. Member for Lancaster and Wyre (Mr. Wallace) mentioned Cookstown. I was educated in Cookstown, and we lived just outside it. I represented that constituency for some 14 and a half years. It was ravaged by IRA terrorism and was for a considerable period known as the killing fields of Northern Ireland. Today, I represent another constituency on another side of the Bann. Many constituencies had different experiences during the years known as the heart of the troubles in South Antrim.
	Some hon. Members feel excited because we were able to drive a coach and horses through the Secretary of State's magic deadline of 26 March. He said that it could not be changed under any circumstances and that no legislation would be brought before this House. With one stroke of the pen, he promised that on 26 March it would be devolution or dissolution, one or the other, with no clouding of the issues or equivocation; it was black and white, and the people of Northern Ireland had better realise that. In my opinion, there was a despicable plan to blackmail the people and politicians of Northern Ireland into accepting 26 March. I am glad that that plan has been thwarted and that once again a message has gone out that it will not be possible to carry out such blackmail, and that whenever Unionist politicians take a principled stand, they will stand by that principle. That message should exercise the minds of many. I believe that a message has been conveyed for the future: Unionist politicians will not yield in the face of threats and blackmail.
	Others are excited because they believe that every hurdle has been overcome. Let me remind hon. Members of the reality of delivery. The Democratic Unionist party made it abundantly clear in its resolution at the executive that it will accept no regression on the issues already determined, and that we will press to ensure delivery by Government and Sinn Fein and make it a reality. On the St. Andrews declaration, we said that no delivery means no deal.
	There is still a need for deliveryfor example, by the Chancellor. The Government must provide an adequate financial package to ensure that any Administration in Northern Ireland have the finances to meet the challenges. Promises that have been made are inadequate and will only undermine devolution when it comes. Let us consider corporation tax and the challenge of getting the engine of industry going again. We are not spongers, as Harold Wilson once said. We are a proud people, as my hon. Friend the Member for Lagan Valley (Mr. Donaldson) rightly said. We are a people with dignity and we want to provide for the future and for the prosperity of our children, but we are confronted with challenges just over a land border that we, as political people, must face and tackle. We can do that only when a sufficient financial package is in place.
	For years, water and sewerage infrastructure has been left to decay. When the Government on this side of the water in the United Kingdom decided to privatise, they increased the standard of and modernised the infrastructure before doing so. Unfortunately, in Northern Ireland, they used the budget and the money given through taxationthere was taxation through the regional rate for that infrastructurefor other purposes. Our infrastructure was left to decline and was being destroyed. For many years, the people of Northern Ireland paid for infrastructure that they never got. The Chancellor and the Exchequer owe it to the people of Northern Ireland to restorenot as a handoutthe money that they paid for that infrastructure.
	The other side of the deal and of delivery is Sinn Fein. We said and we saywe have not changed our mindsthat Sinn Fein must unequivocally support the Police Service of Northern Ireland, the courts, the rule of law, a complete end to paramilitary and criminal activity and the removal of terrorist structures. That is where we stand today. The apex of those structures is the so-called army council. There is no need for an army council when there is no need for an army to threaten the people of Northern Ireland. It must therefore be dismantled.
	The Government stressed before, during and after the St. Andrews talks that there were twin pillars for agreement. One was DUP support for power sharing and the other was Sinn Fein support for policing. The DUP election manifesto provided for the first pillar. Our executive endorsed that on Saturday at a meeting that I chaired. However, Sinn Fein must prove beyond doubt that it is capable of fully delivering the second pillar.
	Councillor Brush was attacked four times by the Provisional IRA, which tried to murder him. The Secretary of State quoted Michelle Gildernew, who is absent from this House but was elected to ither party gets an awful lot of money for not coming here from the Government, who talked about Assembly Members getting paid for not doing their full work. The Secretary of State was selective in his quotation. He said that Michelle Gildernew said that she would give information to the police. That certainly constitutes movementI will come back to that. However, she also said that no republican attacked Councillor Brush and, in the same article, that the attack was not sectarian. Councillor Brush and the people of that area believe that it was a deliberate sectarian, republican attack, but Michelle Gildernew has decided that it is neither. She was asked whether, if she knew of weapons in dissident terrorist hands, she would report it to the police. She said that she would not. That is not what was demanded of Sinn Fein. There was to be unequivocal support for the PSNI, the courts and the rule of law, and a complete end to paramilitary and criminal activity.
	Weapons in the hands of a terrorist organisation are there to threaten, kill, and destroy the peace and stability of a community. It is therefore abundantly clear that it is important to take such weapons from those who have them. For example, I am led to believe that last week, dissident republican groupings brought in a cache of arms. That fact has been hidden; it has not yet been published. A cache of arms was brought into republican hands. What for? What will the Government do about it? If Sinn Fein wants to call itself completely democratic, it must declare that any terrorist uprising, irrespective of the proponents, must be crushed, and that the organisation must be stopped in its tracks and face the full rigour of the law.
	My hon. Friend the Member for Belfast, East (Mr. Robinson) and my right hon. Friend the Member for North Antrim (Rev. Ian Paisley) acknowledged the difficulties for hon. Members of having to meet Sinn Fein, and the fact that no one was jumping up and down about it. As far as I am concerned, the idea of Sinn Fein in a Government is obnoxious. It makes me sick to the pit of my stomach. My thoughts are with the innocent victims, Protestant and Roman Catholic, throughout the community, who have been slaughtered by the IRA and so-called loyalist terrorist organisations. Neither has a place in a democratic society.
	Many people will find it difficult to forgive those who brutally and callously murdered their loved ones. Last week, I believed that Martin McGuinness was a terrorist with blood on his hands. I believed that he had been a murderer. I have to tell the House that I believe that this week, because he is the same person. Irrespective of a person's position, in a democratic society everyone is equal under the law, equally subject to the law and must, therefore, face justice. I do not believe that I have a right to ask for that for the republican community if I do not ask for the same for the Unionist community. If there is failure to meet justice under any political climate, those guilty will never evade the justice of Almighty God, who knows the murders that have been committed. Until the wrong is acknowledged, there cannot be healing.
	I know what it is for my children to look over their shoulder every day and for my wife to look under her car every day. I have known what it is for many years to stand with my constituents and look into coffins nearly daily. Many of those coffins did not hold bodies, but only pieces of them when terrorists had finished with them. We cannot live in the past. We have to build a futurebut a future that is just, honourable, democratic and has a solid sound foundation.
	Hon. Members have already mentioned the day on which Sinn Fein Members may come to this House. There is nothing to stop those Members who are elected to this House from coming to it. That is their right and it has been their right for years: they have failed to represent their constituents in this House.
	Are we looking at a new dawn? I earnestly hope that a new dawn in Northern Ireland will be proven to be true, for bitterness eats into the hearts of individuals. In fact, it hurts the individual that carries it more than those who just walk away untouched and unconcerned. I yearn for an honest genuine peace and a brighter future. Are we to be given the opportunity for it to happen? It will happen only when those responsible for crimes face justice and only when we build a solid foundation on democratic principles alone. I pray that Northern Ireland can enjoy that future.

Jeremy Corbyn: First, I apologise for not being here at the start of the debate. I was attending events in my constituency, but I wanted to take the opportunity to say a few words in this debate, representing a constituency that is home to a large number of Irish people from both the north and the Republic.
	Last week, I attended an Irish pensioners event in my constituency and met people who had been driven to London by the poverty in Ireland. We briefly discussed the situation and they looked forward to today with some trepidation and concern, as they thought it might never happen. But it has actually happened and I would like to place on record my tribute to the Secretary of State and his ministerial team for their efforts towards achieving yesterday's very important meeting. Previous Secretaries of State over the past 10 years should also be praised for doing so much over that time to bring about some kind of resolution to what was seen to be a wholly intractable problem.
	I agree with my hon. Friend the Member for Weaver Vale (Mr. Hall) that many people who have suffered grievously must have very mixed feelings about today. I have met Colin Parry on a number of occasions and found him to be one the nicest human beings one could ever hope to meet: he suffered so much, but has tried to do so much to bring about peace. That is the sort of spirit that we want to see in operation from today onwards. All over Northern Ireland, there are people who have lost loved ones and seen the brutality and violence that can lead to the most horrible deaths. One hopes that this is the end of that particular chapter in the history of Ireland.
	The history of Ireland has indeed been very bitter and bloody in the north and the south. If we look at the history of Ireland from the occupation onwards, we see the famine, the hunger, the Easter rising, the civil war and all that went with it. Then there is the history and process in Northern Ireland itself. One hopes that today sees at least an acknowledgement of the contribution that both communities have made to the history of Northern Ireland and will continue to make in future when the Assembly starts up.
	One also has to recognise that all four of the main parties in the Assembly have made enormous jumps and changesSinn Fein, the Democratic Unionists, the SDLP and Ulster Unionists. I have been a Member of the House since 1983 and like many other Members I have sat here and opposed many of the pieces of legislation to do with Northern Ireland: the Prevention of Terrorism Acts, the broadcasting ban, the travel ban and all sorts of legislation designed to support the idea that there could be a military solution in Northern Ireland, which suppression of speech could help to bring about. I agree with my hon. Friend the Member for Blaydon (Mr. Anderson) about that. Indeed, not so long ago, I voted with SDLP Members on the Justice and Security (Northern Ireland) Bill because I believed that it provided the possibility of continuing the Diplock courts systema system that was wholly discredited. One hopes that normality will return and that Northern Ireland will get jury trialsjust like I hopethe rest of the UK.
	We should pay tribute to a number of people today. In particular, I want to pay tribute to Gerry Adams and John Hume, who both had the courage to go into secret talks and subsequent talks that brought about the Hume-Adams accord, which began to bring about the possibilities of the 1994 ceasefire. That was broken, as we know, and we then moved on to the 1997 ceasefire and subsequent developments. Then there was yesterday's historic event when the Reverend Paisley, as we should call himthe right hon. Member for North Antrim (Rev. Ian Paisley)sat down with Gerry Adams and finally announced that an agreement had been reached. I pay tribute to both of them for bringing that about. It is very difficult to lead a community that is set in a particular direction to recognise the values of other communities within Northern Ireland and lead the way towards a devolved assembly, which we hope will come into operation at the beginning of May.
	Today's legislation is, as everyone now acknowledges, a minor blip in an historic and very important road. Six weeks is absolutely nothing for the prize that lies at the end. I hope that, in passing this legislation tonight, we recognise the huge sacrifices that have been made by many people in all communities. The brutality and the awful pieces of legislation of the past are now behind us, I hope, as we move to a peaceful and democratic future in Ireland. People there deserve the opportunity to live in peace. We should remember those who have sacrificed so much for todayand recognise those who have made important contributions in civil society.
	My hon. Friend the Member for Blaydon pointed out the contribution of the trade unions and, speaking as a former trade union official, I readily acknowledge how the unions were able to provide some kind of common meeting ground where normal working-class politics could operate because of the common interest in retaining levels of public spending, employment and all the rest of it. Huge steps have been made. Today is historic, important and welcome. We look forward to perpetual peace and democracy for all the people of all of Ireland.

David Simpson: I was interested in the Secretary of State's comments in the early part of his speech, particularly when he mentioned some slogansNorthern Ireland is famous for its slogans written on wallssuch as Sinn Hain got the cane and Hain fell into an omelette. Well, he did not mention that one, but I have seen it. They tell me that confession is good for the soul, and I can tell the Secretary of Stateit is a pity that he is not here to listen, but I am sure his colleagues in the Northern Ireland Office will pass the information on to him and it will be recorded in  Hansardthat white emulsion was used for the slogan, and I assure him that at the end of the week, my colleagues and I will remove it. He may want to know who put it up, but my colleagues and I will remove it.
	I do not think that anyone could seriously doubt that the scenes witnessed in Northern Ireland yesterday were of huge significance. Whether they will prove to be a good piece of history or another false dawn will be judged only by time.
	I entered this House in 2005, and I confess to having been on a steep learning curve since then. I was present at negotiations at Leeds castle, St. Andrews and, sometimes, No. 10 Downing street. One thing that I have learned is that one cannot take anyone's word, because one needs to see actions. At Leeds castle, a deal was close, but it did not happenin many ways, I am thankful that it did not happen, because the Northern bank robbery took place afterwards. At St. Andrews, Sinn Fein-IRA promised that they would fulfil their commitments on policing and other issues, but they dragged their heels. They promised many things, so only time will tell whether Sinn Fein-IRA come up to the mark.
	My hon. Friend the Member for Lagan Valley (Mr. Donaldson) and other hon. Friends have mentioned victims. I am part of the victims group in my party, and I listen to and visit a lot of victims organisations. When I was on the road to the airport this morning, I listened to a radio programme in which comments were made by victims, including former RUC officers, the victims of republican paramilitaries and the victims of loyalist paramilitaries. It would take a very hard individual not to be emotionally moved by some of the stories on the radio this morningI heard men, women and young people who were literally in tears. We cannot allow ourselves to be carried away with what has taken place and to forget about the people who have been left in that state. Those people were not only victims in the past, because they are still going through torture in the present, and different acts are still carried out by different organisations in different guises. It is important that we do not forget those people.
	The only way devolution can work is if everyone sings from the same hymn sheet. Trust is a word that has been bandied about a lot over the years in Northern Ireland, and it is lacking in the Unionist community towards Sinn Fein. I suppose that the argument could be thrown back that it is lacking on their side of the community, too, and the only way in which we can move forward is if there is trust on both sides.
	My hon. Friend the Member for Belfast, East (Mr. Robinson) has mentioned that many DUP Members have suffered at the hands of terrorism. My hon. Friend the Member for South Antrim(Dr. McCrea) has mentioned his personal circumstances, and I, too, have suffered at the hands of terrorism, which affected four members of my family. Such matters are difficult. Yesterday, a reporter who knew the background rang me and asked, How do you feel about this? I gave him a glib answer, because I did not have time to talk to him. Afterwards, however, I thought about the question, and I felt a certain amount of anger and a certain amount of sadness and emptiness. Many of my hon. Friends would say exactly the same thing, and different emotions go through one's mind as events unfold.
	I agree with my hon. Friend the Member for South Antrim that Martin McGuinness was a terrorist last week, and as far as I am concerned, he is a terrorist todaythe bottom line is that it is only through the grace of God that he can repent of that. Whatever happens after 8 May, I hope and trust that we will have stable government in Northern Ireland and that we will see a future for our children's children. Like many of my hon. Friends, I have teenage children who are growing up, and I want to see a future for them, but we must get it right. I think that we owe it to the next generation to get it right.

Sammy Wilson: Yesterday has been described as a good day for Northern Ireland, and I believe that there are a number of reasons why it was a good day.
	First, yesterday was possible only because we have had a complete change in the security situation in Northern Ireland. We moved away from a situation in which a party that claimed to be a political party openly engaged in terrorism. Although many people contributed to the process, it is important to note the resolve of the leader of our party, my right hon. Friend the Member for North Antrim (Rev. Ian Paisley), who made it clear that unless guns went and unless support and evidence were provided to the police, there would be no move towards including in government representatives of a party that still espoused terrorism. That resolve, along with world events and pushes by other political leaders including the Prime Minister and the Secretary of State, led to the change in the climate that has made devolution possible.
	Secondly, yesterday was a good day because we are moving away from unrepresentative government in Northern Ireland. How ever hard direct rule Ministers try, they do not represent people in Northern Ireland, because they do not stand for election in Northern Ireland and because they have other duties in their constituencies and in this House. Indeed, many of them represented two or three Departments.

David Hanson: Five.

Sammy Wilson: However, the Minister did not get five salaries. Northern Ireland business was put through this House in an unacceptable way. I remember when the Secretary of State introduced legislation that would have changed the face of education in Northern Ireland. That legislation went through this House with one and a half hours' debate and without any opportunity for further discussion. At the same time, a similar Bill, which had less far-reaching effects, was subject to two major debates in this House and to weeks in Committee. I do not believe that that is a good way to do business or to rule another part of the United Kingdom. Now we are moving towards a situation in which legislation can be considered properly and Northern Ireland business can be attended to properly, which is why yesterday was a good day.
	As has been said, however, yesterday was not a good day for many people, because those people are still suffering and still remember what Sinn Fein did to Northern Ireland. Different people have reacted in different ways. Shortly after the election, I held an advice centre. A lady led her husband into the advice centreshe led him by the hand, almost like a childto talk about incapacity benefit. The lady's husband had been a policeman, and he was unable to put behind him the attacks on him and what he had witnessed, which had affected his mental capacity and everything else. After we dealt with the business, she said to me, Sammy, make sure you go through and sort this thing out. I don't want anyone else to suffer the way my husband has suffered. The very same day, another lady came in who had lost a son who had been in the Ulster Defence Regiment. Of course, her attitude was completely different: Have nothing to do with that bunch of murderers, she said. Different people will have viewed yesterday in different ways.
	I want to emphasise what the hon. Member for Lancaster and Wyre (Mr. Wallace) said: in part, we are where we are today because of the dedicated efforts of the police, Army and security personnel who made sure that the terrorists would ultimately be defeated, and would not be able to run our country. Many of them paid a sacrifice, and we owe them a great debt.
	Of course, other people are unhappy about yesterday, as was shown by the comments of the hon. Member for North Down (Lady Hermon), who only reflects the views of her party leader. Their unhappiness is more to do with a political disappointment. In the case of the hon. Member for North Down, perhaps her faith in the integrity of the Secretary of State had been challenged. Perhaps she really believed him when he said, This is a deadline like no other. It is immovable. It is set in stone. It is set in statute. In parts of Ireland we have moving statues, and we now have moving statutes as well. The hon. Member for North Down is weeping because the Secretary of State said, Those who believe that they can push devolution back to May or October are making a catastrophic mistake, and if devolution is not up and running on 26 March, we will shut up shop. Perhaps she would have preferred the shop to be shut, but it is still firmly opening, and the official opening will take place on 8 May. It will be open for business, and we intend to do the business on 8 May.
	We were told that we could not sneak past the deadline; we never had any intention of doing so. We believed that the deadline had been arbitrarily set, and did not provide the necessary time for business to be done. We marched over it; we did not sneak past it. Perhaps the hon. Lady is unhappy about that, but that is not the view that should be taken. We now have the opportunity to do the business for people in Northern Ireland. It will not be an easy task.
	As the hon. Member for South Down (Mr. McGrady) mentioned, there are huge differences between Sinn Fein and our party, and there are differences between his party and our party. When he and I were first put on the Northern Ireland Policing Board, the same predictions were made that it would not last six months, and that it had to face the insurmountable problems presented by the Patten proposals, many of which the police and the Unionist community opposed. We worked our way around that. I could tell many stories about his role in taking on some of the Patten purists in his party, but I will not. During the four years that he and I were on the Policing Board, we disagreed and were unhappy about things, but we worked our way around them, and as a result policing in Northern Ireland was improved, despite the predictions. The same will apply to this Assembly, and we must address ourselves to the task.
	We have many problems to deal withthe restructuring of our economy, the improvement of our education system, and the planning issues that gum up the workings of our economy. We must deal with them through a form of government that parties in this House would find impossible to work. I listened to the Leader of the Opposition and the Prime Minister promise that they would never engage in Punch and Judy politics, but they still do so. We in Northern Ireland are being asked to overcome even greater differences than those between the two main parties in the House in order to work together. All parties are being asked to work together in a coalition.
	Safeguards have been put into the system, at our insistence, which will make it more sustainable. We intend to make it work. The shop will be open on 8 May. Business will be done. Sometimes, there might be squabbles behind the counter, outside the shop and inside the shop. Ultimately, however, we can do the business for people in Northern Ireland, and that is why yesterday was a good day.

David Hanson: May I say what a constructive debate we have had? There is a rare and bold spirit of optimism in the House this afternoon.
	All my life, Northern Ireland has meant pain and suffering. All my adult life, Northern Ireland has meant bombs, bullets, death and destruction. Those have been the images for people not just in Northern Ireland but throughout Great Britain and the world. My hon. Friend the Member for Weaver Vale (Mr. Hall) gave us a stark reminder that that pain and suffering was not just confined to Northern Ireland but has spread throughout the United Kingdom and the world. Soldiers from my constituency have died serving their country in Northern Ireland. All my life, devolution has been a stop-start process, with Parliament buildings lying empty, Members elected to do jobs that they could not do, and Members of Parliament and Assembly Members not fulfilling their tasks.
	In the Northern Ireland that I have come to know over the two years for which I have had the honour of having this post, those painful legacies still exist, and the difficult challenges of the past still reverberate. The experiences of those such as the hon. Members for South Antrim (Dr. McCrea) and for Lancaster and Wyre (Mr. Wallace) are still living memories for people, every day of the week, and every week of the year. But the Northern Ireland that I have come to know is also one that yearns for peace, prosperity and a stable future for all its people. The generosity of spirit and outlook that I and my ministerial colleagues have experienced, and the wish for local politics to work, through the difficult decisions that we have had to take, have kept us in touch with the true aspirations of the people of Northern Ireland. The economic promise, friendship and tourism, and the cities of Londonderry and Belfast, which are on the move, are products of the peace brought by hard-won bargaining and stances on all sides, and by brave actions by brave politicians on all sides.
	As right hon. and hon. Members have recognised throughout today, this has been a historic week for Northern Ireland. I pay particular tribute to the right hon. Member for North Antrim (Rev. Ian Paisley) and, as Members have done, to the Member for Belfast, West (Mr. Adams), for working together to take on the challenges of the future, while not failing to recognise the difficulties of the past, or the fundamental differences in their political outlooks.
	The right hon. Member for North Antrim referred to a star of hope. We now have that hope in Northern Ireland, but I and my right hon. and hon. Friends wish and believe that the Bill will see not just hope for future, but the beginning of a new dawn for the people of Northern Ireland, in which the past is not forgotten but individuals can work together for the good of all in Northern Ireland and for a strong future, and in which their traditions and loyalties, whether to the Crown or to a united Ireland, are recognised, but they work together, in peace and prosperity, for the people of Northern Ireland. At last, Northern Ireland will see local politicians from all sides exercise their mandates to represent fully the people who elected them into government on 7 March. My right hon. Friend the Secretary of State, all direct rule Ministers and I are acutely aware that we do not have electoral roots or community contacts in Northern Ireland. We have not been able to work as local politicians could in Northern Ireland.

Laurence Robertson: The Minister will be aware that an awful lot of important legislation has been passed through statutory instruments in the House. Now that we have a clear agreement between the partiesso strong an agreement that the Government are prepared to move the immovable deadlinewill he guarantee that no further such statutory instruments will be introduced?

David Hanson: I would very much like to give that guarantee, but I cannot for the simple reason that legislation might be required in the next few weeks, through the usual channels of this House. There will be matters in respect of which we will have to undertake legislation, but I shall give the following commitment. As my right hon. Friend Secretary of State said earlier, we, as direct rule Ministers, want to act in partnership with the Member for Belfast, West and the right hon. Member for North Antrim in looking at the programme for government over the next few weeks and months until 8 May. We want to work with them in order to have local democracy. We want to give them support and help, and we will do so.
	Today is an historic day for the people of Northern Ireland. It brings together the right hon. Member for North Antrim and the Member for Belfast, West in moving towards a positive future for all the people of Northern Ireland. That will give them the opportunity to ensure that in future the children of Northern Ireland do not experience the pain and difficult times that have been experienced in the past. We will work with local politicians to make this a success, and
	 It being three hours after the commencement of proceedings on the Business of the House: Northern Ireland (St. Andrews Agreement) (No. 2) Bill motion, Madam Deputy Speaker  put the Question already proposed from the Chair, pursuant to Order [this day].
	 Bill read a Second time.
	 Bill immediately considered in Committee of the whole House, pursuant to Order [this day].

[Sylvia Heal  in the Chair]

The Chairman  put forthwith the Questions necessary for the conclusion of proceedings in Committee, pursuant to Order [this day].
	 Clauses 1 and 2 ordered to stand part of the Bill.
	 Bill reported, without amendment.
	 Motion made, and Question put forthwith, pursuant to Order [this day], That the Bill be now read the Third time.
	 Question agreed to.
	 Bill read the Third time, and passed.

Orders of the Day

Order read for resuming adjourne d debate on Question [21 March].

AMENDMENT OF THE LAW

(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
	(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide
	(a) for zero-rating or exempting a supply, acquisition or importation,
	(b) for refunding an amount of tax,
	(c) for any relief, other than a relief that
	(i) so far as it is applicable to goods, applies to goods of every description, and
	(ii) so far as it is applicable to services, applies to services of every description. [Mr. Gordon Brown.]
	 Question again proposed.

Budget Resolutions and Economic Situation

Alistair Darling: This is the last day of the debate on the Budget proposed last week by my right hon. Friend the Chancellor. I want to focus on the Budget as it affects business in this country, because we live in a time of massive and rapid economic change that will affect each and every one of us as individuals, and which brings new challenges for British businesses and for our economy. This budget will help us to meet those challenges. It encourages investment to build Britain's long-term future. There are measures to help us deal with the consequences of the economic changes to the world climate, as well as measures to increase prosperity.
	The Chancellor was able to achieve that against a background of a strong and stable economy, which is enjoying the longest period of stability on record. We expect the economy to grow with historically low mortgage and interest ratesjust half those of the 1980s and 1990s. If we are to compete in the new global economy, we need to invest. We need to invest in transport and other infrastructure, and in education and skills and science, and we must also ensure that we have a flexible and highly skilled work force.
	For businesses, we need to create the right environment to encourage innovation and a tax structure that encourages investment and research and development. Ten years ago, we had the lowest level of investment of the G7 countries, but now, alongside North America, we have the G7's fastest growing business investment. It has risen in real terms by 48 per cent. since 1997. In the last quarter of 2006, total business investment rose by 4.5 per cent. and manufacturing investment by 3 per cent. Compared with 2005, total business investment rose by 13.5 per cent. and exports of goods and services are also up.
	Britain is seen as a good place to do business. We are well placed in respect of ease of doing business. We also have a worldwide reputation in many areas, such as pharmaceuticals; almost 20 per cent. of prescription medicines are developed in the United Kingdom. It is not only the new industries that are doing well; established industries are doing well, too. The automotive industry has had its problems, but it produced more than 1.5 million vehicles last year, almost reaching the number of vehicles that were produced in the 1970s, which is regarded as the heyday of British car, van and lorry manufacturing. There is a new model of Mini, and Nissan has the most productive plant in Europe. There are many other examples that show that the British car industry is doing well. The names might be different from those of 30 years ago, but the success is noteworthy.
	The aerospace industry has a turnover of 22 billion, and the Department of Trade and Industry supports research and development 153 million in the last year. There has also been success in that industry. I hope that, with the award of new work on carbon technology in relation to Airbus, there will continue to be developments in that sector.
	In new hi-tech sectors, the UK environmental industries are growing at 10 per cent. a year, providing a total of 100,000 jobs in the next 10 years, and our bioscience industry is the second biggest in the world after that in the US. British industry is doing well in those sectors, as it is in nanoscience and nanotechnology research, where our academic standing is world class. That needs to be converted into commercial success, as those are the areas in which we will have to compete in the future.

Graham Stuart: The Secretary of State is giving us a list describing the golden uplands of Labour economic management, but will he explain why there has been a decrease in the number of people employed in manufacturing since Labour came to power? In the past four years of the Conservative Government, 200,000 more people were employed in manufacturing, so there has been a collapse under this Government.

Alistair Darling: The hon. Gentleman carefully picked a few years of the 18 years that the Conservatives were in power, because of course if he had cared to look across the entire 18 years he would have seen that there were substantial job losses in manufacturing. It is the case that, for a long time now, structural changes have been taking place in our economy, and that has been happening in other economies as well. There has been a move away from manufacturing towards the service industry. For example, our financial services industry is indisputably a world leader, and it has grown massively since the 1980s.
	However, manufacturing still represents about 14 per cent. of our gross domestic product, and I gave some examples of where we are doing very well. We have a good story to tell in engineering generally, and in aerospace, the automotive industry and other areas there is good-quality employment. I mentioned that manufacturing output was also up.
	I think that Members in all parts of the House acknowledge that there have been substantial structural changes in our economy. That should not unduly worry us. It is important that we have a balancethat there is a mix. Manufacturing is very important: to coin a phrase, manufacturing matters. However, it is also important that we are able to exploit our service industries, which do well in various parts of the world. When I visit countries such as China and India, people recognise that we have something in the City of London and our financial services industry that other parts of the world do not have. So manufacturing does matter, but what is also important is the strength of the economy overall. On any view, what we see today bears comparison with what we saw in 1993, or in 1983, for that matter.

David Gauke: Earlier this week, the economist Bridget Rosewell presented the Treasury Select Committee with evidence suggesting that the vast majority of the new jobs created since 1997 are in the public sector. Does the Secretary of State agree?

Alistair Darling: There are new jobs in the public sector. Indeed, it is a matter of some pride that there are more teachers, doctors and nursesthat makes a difference. Such spending has not been supported by the Conservatives these past 10 years, although they do give the impression at every Prime Minister's Question Time that they would like even more spending on health and education, for example. Other sectors, such as the financial services industry, have expanded dramatically in the past 10 years, and not just in London but in other centres such as Leeds and Edinburgh, part of which I represent.

Robert Smith: Given the Secretary of State's experience with the Pilot taskforce, he will know that a lot of manufacturing investment comes from the North sea oil and gas industry, and that many manufacturing employers in my constituency support that industry. Is it not therefore vitalnot only for those jobs but for the long-term income of the Treasurythat we have a tax regime that does not frighten off investors, and which maximises the long-term attractiveness of the North sea, so that we can maximise the gain in terms of our energy and employment needs?

Alistair Darling: I agree with the hon. Gentleman and, as he knows, I am making a point of chairing the six-monthly meetings with the oil supply industry because it is very important that we have a regime that encourages investment. Two interesting things are happening in the North sea. Some of the forecasts of those who said that the tax changes that we announced at the end of 2005 would be bad for the industry were not borne out. Investment is up, and a very healthy list of people are applying for the last round of licences to explore. We are also working closely with the industry in examining the possibility of extracting oil west of Shetland, where the waters present extreme difficulties, as the hon. Gentleman knows; however, there is a lot of oil there.
	When we announced the changes to which I referred, we said that the North sea oil taxation regime would remain for the rest of this Parliament. The industry asked us about that as recently as last November, and when I met Pilot, it said that, whatever else happened, it wanted a stable regime. I appreciate that, as of last week, one or two people appear to have decided that that is not what they meant when they said they wanted the regime to stay the same. We recognise the importance of North sea oil, and allowances in that industry are different from the rest of the corporation tax regime, but I believe that the North sea regime is stable and right.
	What is worrying is that the revenues from North sea oil are down dramatically; indeed, they will be down about 4 billion, on average, over the next few years. For the Scottish National party, which has predicated so much on North sea oil, that is extremely worrying. A lot of the money that it has already spent simply will not be there.

Robert Smith: I thank the Secretary of State for giving way again. Does he recognise that a lot of that extra investment came about because of a very high oil price throughout the world? The gas price is now dropping, which is obviously benefiting users. However, when oil is extracted, gas is often extracted at the same time, so the North sea price is effectively dropping. The Chancellor made it clear that the original tax increase was predicated on the very high prices around the world. Given that gas prices are falling, costs are rising dramatically and fields are getting smallermoreover, the projected forward investment from the industry appears lowerthe Government have to be careful not to kill the goose that lays the golden egg.

Alistair Darling: The current North sea oil price is not so very different from 12 months ago. We have made it clear over the past 10 years that we would of course look at the North sea oil tax regime. It is thought that there might be only 30 years-worth of oil and gas left in the North sea, but in order to maintain security of supply in this country it is in our interests that we do everything that we possibly can to continue to extract oil and gas. Last week's announcement is not going to change but, through the hon. Gentleman, the industry will doubtless want to look at the response document that the Treasury published on the same day, and which examined the very issues that he has set out.
	The North sea oil and gas industry has existed for the past 36 years and, as I have said, we will do everything that we can to encourage it, but it is also important to look to the future, which is why we have doubled the science and technology budget since 1997. Indeed, more than half the Department of Trade and Industry's budget now goes towards science and technology. Last week's Budget provided a further rise in science spendingfrom 3.4 billion this year to 4.9 billion by 2010-11. That is in addition to more spending for the Department for Education and Skills, particularly on universities.
	We have a worldwide reputation for being good at science. We have 1 per cent. of the world's population, but 5 per cent. of its science and some 12 per cent. of scientific citations. In the past few years, we have spent more than 3 billion building world-class laboratories, and anyone who visits universities throughout the country will see the result. Ten years ago, many scientists were working in buildings on which money had not been spent for years; now, across the country we increasingly see modern, up-to-date laboratories. Patents are up 98 per cent., and income from intellectual property is up by more than 100 per cent. In the past three years, 25 companies have emerged from universities and have floated on the stock exchange; they have been valued at 1.5 billion. University spending and research on fuel cells and nanotechnology, and in the biomedical field, also show how such spending and research can be turned into commercial opportunity.
	Last week, I announced a 100 million competition to bring universities and business together to lead in high-tech innovationfrom medical research to environmental transportin order to convert that scientific breakthrough into commercial success. We already fund more than 600 projects with over 430 million of Government funding. Research and development as well as innovation are keeping the UK at the cutting edge of international competition. R and D tax credits, which I understand the Conservatives now oppose, have delivered nearly 1.8 billion in support for business and have made a real difference. Large companies such as Nissan have used them to support investment in design, and smaller companies such as Wolfson Microelectronicsan Edinburgh university spin-out company that developed the technology at the heart of iPodshave used them to continue to grow and to innovate in their business. The Budget increased the amount of R and D tax credits available, and in total about 4,500 small and medium-sized companies are claiming more than 250 million a year in tax credits. Those credits are absolutely essential if we are to support the investment that will enable us to compete in the future. It is no wonder that we have attracted more R and D projects than any other country in the European Union.
	It is also important that we continue to invest in education and skills, which the House debated last week. Education spending has doubled since 1997. Then, funding per pupil was 2,500, but it will rise to 6,600 by 2010. It is providing us with better equipment, modern schools, more teachers and more spending on universities.
	Britain must also remain a competitive place to do business. In the Budget, we announced reforms to employment law that simplify procedures and cut the cost of workplace disputes. We are very conscious of the need further to reduce burdens on business. Because of the strength of Britain's economy, the Chancellor was able to cut corporation tax again, to 28p, and it is lower than that of all our major competitors. We also believe that investment decisions should be driven by commercial, not tax, considerations. Of course, the reduction in the basic rate of income tax helps not just individuals but many small businesses. Up to 3.4 million sole traders will benefit from personal tax reforms and allowances. They will also benefit from the new annual investment allowances of up to 50,000. Those allowances show that we recognise the need to encourage that investment, as well as research and development into new products.

Mark Prisk: Does the Secretary of State recognise that, as the Federation of Small Businesses has shown, the vast majority of female entrepreneurs find that, as start-ups, they are in the 5,000 to 18,000 tax bracketthe very bracket that is going to lose out? In what possible way does that encourage more female entrepreneurs?

Alistair Darling: It is worth bearing it in mind that of the just over 4 million small businesses in this country, about 3.4 million are sole traders and are therefore taxed through the income tax system. Because of small business rate allowances such as the annual investment allowance, which is quite generousmany forms of business spending that people might typically contemplate are deductibleif a business invests, say, just over 2,300 in additional investment, the amount of tax that it has to pay is reduced. The regime that we are putting in place helps small businesses and individuals who benefit from the lower rate of income tax and the annual allowance. The research and development credits that are available will also help businesses do more. It must be right that we focus our tax allowances on the behaviour that we want to encourage, and we want businesses to do more research and development and to reinvest and grow, because that is how they will flourish. Our regime is and will be beneficial for small businesses and I believe that we will see that sector grow.

Mark Prisk: The annual investment allowance changes mean that unless one invests 50,000, one receives no benefit. Therefore, the change in corporation tax will mean a lot of losers among small companies. Does the Secretary of State agree with Robert Peston, the BBC commentator, who has looked at the issue in some detail and shown that the vast majority of service businesses will be automatically excluded because they do not make the capital investments that the Government are trying to support?

Alistair Darling: I have not studied Mr. Peston's reports, or heard them recently, but I will take the trouble to do so when I have the time. It is not the case that a company would have to invest 50,000 before it saw any gain. As I have just been explaining, a medium company that might be faced with a 500 increase in tax would need to invest only 2,300 more to offset it. In other words, they would not pay more tax. There are many companies and sole traders who, if they use the research and development tax credits, will pay less than they do at present.
	The objective of the reforms of corporation tax and business taxation is to reduce the rate and to target the allowances in a way that encourages investment and research and development. I am sure that the hon. Gentleman would agreealthough perhaps not in publicthat some of the allowances that are claimable today were put in place after the second world war when entirely different objectives were important, such as reconstruction, for obvious reasons. It must be right that the Government take the opportunity in the 21st century to ask what is appropriate to encourage investment. Our future depends on our being able to encourage businesses to invest, especially in research and development, on which we have a good record. The Budget will encourage further investment. From a position of economic strength, we have been able to increase investment in science and in education as well as other public spending. We have been able to do more to help businesses invest in the future, as well as making sure that the tax system rewards work and at the same time helps families with children.
	I can also tell the House that we will continue with our reforms of the labour market, which will help parents to work more flexibly and balance their time at work and time with their families. This weekend sees further rights to request flexible working, which will be extended to more than 2 million carers, and that builds on our other reforms. On that issue, as on so many others, the Opposition are pointing in two separate directions. A few months ago, the Leader of the Opposition said that he wanted more flexible working. He presented himself as the thoroughly modern man. However, in today's  Financial Times he has briefed that he does not want to see any extension to flexible working. He has gone back to the position that we would expect from the Tories.
	It is not just on family-friendly policies that the Tories are saying different things. On climate change, as my hon. Friend the Economic Secretary pointed out in last night's debate, the Opposition are saying one thing and doing another. On energy, where we have to meet the twin challenges of security of supply and climate change, the Tories are against the climate change levy, but in favour of a tax on holidays. They would tax individuals who fly, but allow businesses to claim back that tax. They say that they are in favour of renewable energy, but up and down the country Tory councils are opposing the biggest single source of renewable energywind farms or bird blenders, as the Leader of the Opposition calls them. They are also opposed to the renewables obligation. In contrast, this Budget has a range of measures that help tackle climate change, as the House debated yesterday. If it is successful, carbon capture and storage will present us with an opportunity not just to reduce the amount of carbon we produce, but to export that technology across the world.
	If we are to continue to remain competitive in the face of the investment being made by China, India and other developing countries, we must also recognise the key role that public expenditure plays in, for example, schools and universities. Perhaps today, the last day of the Budget debate, the Opposition will finally tell us whether they will match our spending plans. Public expenditure, which is 552 billion this year, will rise to 674 billion at the end of the spending review period. That is investment in schools, hospitals, law and order and support for business. Are they prepared to match that spending? Why cannot they tell us?
	The problem for the Opposition is that they are trying to convince one audience that they really want to cut spending and taxes, and another that they want to spend more on public services. I feel sorry for the shadow Chancellor and shadow Chief Secretary, because hardly a day goes by when the Tories are not promising to spend more money on extra prison places, more housing, and a new border police force. At the same time, they have already promised to cut another 1p off corporation tax. They also have a commitment to abolish stamp duty at a cost of 4 billion, as well as to introduce a transferable married couple's allowance that would help only 1 million of the 12 million married couples.
	The Tories have massive spending commitments, but they want to promise tax cuts. That is why they have their third fiscal rule, which attempts to square a circle, but that cannot be done. The rule would have meant 21 billion less spending this year alone. That third rule is a rigid, inflexible approach that takes no account of what the economy needs. It would not have allowed the investment that we have made in public services over the past seven years. The Leader of the Opposition said that his policy would make a dramatic difference. Indeed it would: he would have spent substantially less at the very time that our economy needed that spending over the past 10 years. It is that incoherence that led to the massive economic problems of the last Tory Government in the early 1990s, in which the Leader of the Opposition played such a central and pivotal role as a key adviser.
	We have struck the right balance between borrowing, tax and spending. We have made investment to build public services, and provided incentives to invest and a tax system that is fair. This is a Budget for investment for the environment, and one that will equip this country to meet the challenges that it faces. I commend it to the House.

Mark Prisk: I begin by offering the apologies of my hon. Friend the Member for Rutland and Melton (Alan Duncan). He has a long-standing engagement of some 50 years: I will leave the House to work that one out.
	Last week, the Chancellor gave us his view of the state of the economy. His speech, however, was as notable for what he left out, as for what he actually said. The Chancellor did not, for example, tell us that productivity growththe measure that he once called the fundamental yardstick of economic performanceis now barely half the rate that it was under the last Conservative Government. He did not mention that business investment, a key driver of future economic growth, has now fallen below 10 per cent. of GDP for the first time since records began. He also neglected to mention that while Britain had a balance of trade surplus in May 1997, under his stewardship there has been a trade deficit every month since January 1998, with last year's deficit being an all-time record of more than 54 billion. The sleight of hand did not end there. While the Chancellor was proud to boast that his borrowing forecast was 1 billion better than in his pre-Budget report, he forgot to mention that it was still 16 billion worse than he predicted in last year's Budget.
	So the Chancellor's speechunlike that of the Secretary of State, to be fairwas a triumph of omission over candour. But perhaps the most interesting omission was on the UK's declining competitiveness. The World Economic Forum is the leading independent authority which assesses international competitiveness. It has found that in recent years the UK has fallen further and further behind. For example, when it comes to starting up a business, the UK now ranks 22nd in the world, behind Latvia and Tunisia. When it comes to the burden of the tax system, we are now down at No. 25, below India and Nigeria. When it comes to the burden of regulation, the UK is now ranked a dismal 41st, below Azerbaijan and Burkina Faso. The result is that while the Chancellor has been in office, the UK has fallen from being the world's fourth most competitive nation to being the 10th. I wonder why that was not in his speech?
	The Opposition do not pretend that everything is wrong with the economy, but it would be nice if Treasury Ministersand they are well represented here this eveningfor once could be a little more candid about the underlying problems that our economy is facing, and about the tax burden that they are imposing.
	It is clear that the British people see the Budget for what it isa tax con, and not a tax cut. It is a con that hits the poorest hardest. Thus a full-time employee on the minimum wage will pay more than 160 more in tax as a result of the Budget. The Chancellor says that people can claim the money back through higher tax credits, but he knows full well that take-up rates for tax credits are often only 60 per cent. It is not even a Budget that takes money with one hand and gives it back with the other: it is one that takes people's money and then gives them a form to fill in instead.
	Of course, the tax con was not limited to personal taxes. For more than a week, the Treasury was leaking that it was to be a Budget for business. However, page 208 of the Red Book shows that the total taxes on business are to rise by more than 1 billion next year and another 800 million the year after.
	I welcome the fact that the Government have taken our advice in respect of large companies and are going to simplify reliefs to cut the headline rate. However, although the Chancellor claimed to be tackling tax complexity, he does not seem to realise that he is part of the problem. In 1997, Tolleys yellow tax handbook was 4,550 pages long; in just nine years, it doubled in size to more than 9,000 pagesnot least as a result of more than 100 stealth tax changes.
	Last year's Finance Bill was a bit of a dull affair, comprising a mere 181 clauses over 489 pages, and so complex that it needed three separate volumes of explanatory notes. That represented a quiet day in the Treasury office. When he replies to the debate, perhaps the Chief Secretary can tell us how many pages long Tolleys tax guide will be after this year's Budget.
	For business, every change that the Government make costs time and money in compliance. Indeed, the Federation of Small Businesses says that simply complying with Government red tape now costs every small business in this country seven hours a week. It is no wonder that our productivity is so poor.
	Business and investors need clarity and certainty, but from this Chancellor they get only confusion and complexity. Never mind Stalin, the Chancellor's constant tax changes are more Maoist in charactera form of permanent revolution in regulation.
	As was briefly mentioned in the Budget, a vital part of the Department of Trade and Industry's remit is supporting business, especially small business, yet all too often Ministers have no idea whether the programmes that they are running have any effect. Earlier this month, we published the interim report from our small business task force, which is chaired by the entrepreneur Doug Richard. It found that, overall, the Government spend 12 billion of taxpayers' money on small businesses, but cannotor will notsay whether the money is working.
	Part of the problem is that the whole system has got out of control. There are roughly 3,000 schemes, and they are run by approximately 2,000 different public bodies and their contractors. Just as worrying is the fact that, in most schemes, much of the money is lost in administration. Indeed, the task force found that, even in the best schemes, a third of the money in such schemes is lost in administration.
	Not surprisingly, business confidence in state advisory services is low. The FSB has found that just 4.4 per cent. of small businesses use Government-funded advice, with more than half consulting accountants. Moreover, those small businesses that use public services are often deeply disappointed. The task force found that less than 0.5 per cent. of all small businesses using state agencies for advice were satisfied with the advice provided.
	Given the amount of taxpayers' money involved, it is extraordinaryalthough, sadly, not surprisingthat the Government can spend so much and have so little to show for it. Small businesses deserve better.
	It is these small businesses that are the real losers in this Budget. As a result of the changes announced by the Chancellor, small companies face an extra 820 million tax bill from the Treasury. The Budget increases the rate of tax that small companies pay by 3 pence in the pound, and creates a new set of complex capital reliefs. The Chancellor knows all too well that many small companies will not be eligible for those reliefs, or will not apply for them.
	Thus most service businessessuch as design agencies, hairdressers, shops or accountantswill be losers. Those companies innovating through contracting-out will also lose out, and even those business that do invest will still be losers under this Budget.
	As Nick Goulding, chief executive of the Forum of Private Business, said:
	The Chancellor has used smoke and mirrors to disguise the fact that there is nothing in this budget to support small businesses.
	That is why we will be voting against the Chancellor's small business tax rises later tonight. They are bad for small companies and bad for the economy.
	Last Wednesday, the Chancellor had a golden opportunity to match his enterprising rhetoric with practical action to help business. He could have set out a balanced view of the strengths and weaknesses in the economy, and explained the long-term threats and opportunities. He should have helped small businesses as he helped large firms, but instead he pretended that the Budget was both tax-neutral and a tax cut. Instead of simplifying the tax system for all businesses, he made it worse for the smallest. Instead of an income tax cut, we had a tax con.
	Beyond the spin and smoke and mirrors, people can now see what kind of Chancellor this really is: a man whose tax promises cannot be trusted. If he becomes Prime Minister, they will not forget it, nor will they forgive him.

Geoffrey Robinson: I am pleased to follow the Opposition spokesman in this debate. I am delighted that there is such a strong turnout from the Treasury team, even though this evening is dedicated to the DTI aspect of the Budget. The Economic, Financial and Chief Secretaries to the Treasury are all here, as is the Paymaster Generalall are in their places.
	One of the least satisfactory aspects of the Budget debate, here and elsewhere, has been the unpleasant and unnecessary personal attacks on the Chancellor. The hon. Member for Hertford and Stortford (Mr. Prisk), who has just spoken, repeated some of them. Anyone taking an objective view over the past 15 years would say that someone who could be Labour's shadow Chancellor for five years in the build-up to Government, and then perform as my right hon. Friend has in the role of Chancellor for 10 years, yet remain fundamentally sane [ Interruption. ] I do not think Opposition Members question my right hon. Friend's sanity, but his is no small achievement.
	As I look at the Chancellor's record, it seems to me that he has emerged with a remarkable combination of outcomes. He is feared by the Opposition, he has emerged as the envy of some of his peers, and he is still held in deep affection by his friends. Finally, throughout the country, he enjoys general respect, if nothing more.

Peter Luff: Will the hon. Gentleman give way?

Geoffrey Robinson: In a moment. By any standards, that is a remarkable set of outcomes. Any sensible Member of this Houseand there may not be many on the Opposition Bencheswould be happy to plead guilty to them. In fact, my right hon. Friend's remarkable record goes further. If I am to believe what I read in the press and elsewhere, he is poised to emerge as primus inter pares of us all.

Peter Luff: Will the hon. Gentleman give way on that?

Geoffrey Robinson: I will in a moment, if the hon. Gentleman keeps quiet.
	That is something that none of us would be ashamed of, nor should we be.
	However, I have bone to pick with the Chancellor and the Treasury Front Bench about the removal of the 10 per cent. basic rate. I cannot believe that that is the last word from my right hon. and hon. Friends on the subject. It is hurting many people whom the Government never set out in any of their policies to hurtI accept that that is a consequence and not an intention of the Budget. Indeed, when the 10p rate was introduced it was precisely to alleviate those problems that, in part, we are now creating. I know that there are tax benefits and that there are many other things that we have done for that category of taxpayer, but the matter should be revisited, and I hope that we will do so before the next Budget. Having made my point, I shall leave it at that. I wish to make one more point, as I see that the hon. Member for Mid-Worcestershire (Peter Luff) is not quite as keen to intervene as he was.

Peter Luff: rose

Geoffrey Robinson: I shall give way to the hon. Gentleman.

Peter Luff: I strongly agree with what the hon. Gentleman has been saying, and I welcome his comments. In response to his point about the Chancellor winning the heart and soul of the British nation did he, like me, watch a live opinion poll on Sky News during the Chancellor's interview on that programme? It remained resolutely negative throughout the entire interview, except for one fleeting momentand here I shall give the hon. Gentleman an opportunity to pay tribute to the Chancellorwhen the right hon. Gentleman boasted about not joining the euro. I pay tribute to the Chancellor for that important non-decision.

Geoffrey Robinson: May I tell the hon. Gentleman that the one thing to which he drew attentionstaying out of the euro, despite many pressureswas a unique achievement by the Government? I can think of one or two Ministers who are in the Chamber who were influential in that vital decision. Let us leave it at that.
	I said that the Chancellor is respected throughout the country, and I can assure Opposition Members, much to their disappointment, that we will not let our policies or decisions be affected by short-term fluctuations in opinion polls. Those who look at those short-term fluctuations [ Interruption. ] Yes, exactly, they will mislead themselves, and indeed, Opposition Members are in danger of doing so at the moment. We will stick, as we have done, with policies committed to long-term stability, which is a remarkable achievement, and to the long-term growth and prosperity of the economy.
	I wish to put one more point about the specifics of the Budget to Ministers for consideration. I understand all the reasons why we have taken the step, which again corrects something that we did earlier, of increasing the tax rate for small companies. I am aware of capital allowances, the research and development allowances and the other measures that have been taken, which are potentially of considerable benefit to the small business sector. Of course, as my right hon. Friend the Secretary of State for Trade and Industry clearly said, roughly 3.5 million of the 4 million small companies in the UK are sole traders, so they are not affected by the measure, but there is still a substantial group of companies that are affected. We should not undertake one of those big, complicated bureaucratic reviews, but we should take a clear-headed sharp look at how we spend the money in support of small companies.

Mark Prisk: So the Chancellor is going mad and his small company tax change is bonkers?

Geoffrey Robinson: In fairness to the hon. Gentleman, he made that point earlier. He made one or two sensible points among others that were party political, and I take them absolutely in the spirit in which they were made.  [ Interruption. ] Shameful, indeed.
	I want to finish with those two points, and say something to the Treasury in whatever new shape it emerges. I would like tell my right hon. Friend the Secretary of State for Trade and Industry, who has served throughout the Government with such distinction, that in whatever new shape the Treasury emerges, let us stick with the long term. Let us stick with stability, let us stick with that fixed purpose that has served us so well so far, and I am sure that in whatever shape that team emerges, it will guarantee the Government and the nation the same success as we have had so far.

Vincent Cable: I reassure the hon. Member for Coventry, North-West (Mr. Robinson) that I do not intend to question the Chancellor's sanity, but I do rather question his commitment to social justice for the same reasons that the hon. Gentleman does, with his qualification.
	Six months ago, I proposed an alternative dream Budget that was tax-neutral and included the following features: a 2p cut in income tax; lifting the upper earnings threshold and aligning income tax with national insurance; making greater use of environmental taxes; cutting corporation tax, and offsetting it with reduced allowances on business taxation; and getting rid of the 10p rate of tax. When I got over the frisson of flattery at discovering that that had been mercilessly plagiarised in the Budget, I realised, as many of us did, that there was one important detail that was different: the conversion of the 10p rate not to zero but to 20 per cent. That is a big difference, because instead of 2 million people paying no tax at all, they are paying more tax. That goes to the heart of what the Budget is about. It is not about economic managementit is economically neutral, which is a positive factorbut it is about redistribution and equity and how the gains and losses have fallen.
	There has been an attempt to introduce another dimension to the debate: what the Conservatives call distributing the proceeds of growth and what the Government call the third rule. That is a somewhat arcane debate because, as I perhaps rather simple-mindedly see it, the Chancellor is already redistributing the proceeds of growth. Approximately 40 per cent. of any increment in growth has been allocated to the public sector, and the remainder has been allocated to private investment and consumption. That is the forecast, and I am perfectly comfortable with it. Unless the Conservatives are willing to set out a different number and how they propose to achieve it, we all have to operate on the working assumption that we are reasonably content with the share of the state in gross domestic product. That is where I start from.
	I want to tackle the Budget on the Chancellor's own criteria, and pose three simple tests: is it fairer, is it greener, and is it simpler? On fairness, a useful benchmark is where we are in income and wealth distribution. The data that the Government have made available are a little dated, but the Government suggest that income distribution, measured in the usual statistical wayGini coefficients and so onis roughly what it was when the Conservatives left office. It deteriorated for a while, it then improved a little, and it is now more or less what it was when the Conservatives left office. Help for income redistribution has been provided by tax credits, whatever their other problems, but income redistribution has been worsened by the council tax, which is regressive in relation to income. The problem area is the distribution of wealth, and that was the purpose of the question that my right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell), the leader of the Liberal Democrats, asked the Prime Minister last week.
	It is shockingand it is difficult to explainthat whearas when the Conservatives left office the wealthiest 1 per cent. of the population had 26 per cent. of marketable wealth or financial assets, that figure has now gone up to 34 per cent. When the Conservatives left office, the bottom 50 per cent.the lower half of the British populationowned 6 per cent. of the country's asset wealth. That has now shrunk to 1 per cent. under a Government and a Chancellor who often use the language of social justice, which is an appropriate criterion against which to measure the Budget.
	The impact of the combination of the 10p tax rate change and the reduction in the standard rate is complex. The Institute for Fiscal Studies has run through the numbers, and it has concluded that one in five people lost out. Almost all of them are low earners who are single or childless couples. A couple of people who came to my advice surgery last Friday illustrate the problem perfectly. One was a widow with part-time earnings, who has never paid more than the 10 per cent. tax rate, as she is in the 5,000 to 8,000 band. She will simply pay more tax, without any offsetting credit. She is struggling to pay council tax and all the other impositions that she faces. The other was a young man who has just graduated and is starting life as a graduate scientist in the under 18,000 band. He is a loser, and he does not have any offsetting gains. Those are the kind of people who lost out in the Budget. In a way, that is not surprising when we recall what the Chancellor said when he introduced the 10p tax ratethe progressive policy that he is now reversing:
	Nearly 2 million people will see their income tax bills cut in half, and take home 90p of every pound they earn.[ Official Report, 9 March 1999; Vol. 327, c. 188.]
	That policy is now being reversed.
	On the other side, we have to ask who benefits from the Budget, because people clearly have benefited. Some groups have benefited substantially. It is particularly worth focusing on one group: wealthy pensioners. Someone with a pension pot of 1 million, which is certainly reasonably wealthy, and from which with sensible investments they will receive an income of 50,000, will benefit substantially in several ways. They benefit from the lifting of the upper rate of tax. They will not pay national insurance and crucially, and rather oddly, the Government have retained the 10p rate for unearned income. That is difficult to understand. I remember the days when the Labour party put 98 per cent. tax on unearned income as it was considered rather evil, but now it is treated preferentially. When people earn income they have to be charged 20 per cent. at the first rate, yet they pay only 10 per cent. on unearned income. Affluent pensioners who are paying into their savings will receive additional top-rate relief of 40 per cent. and so on, so they benefit in several respects. I do not begrudge them that, but it is worth noting that they are the principal beneficiaries of the Budget.
	Pensioners who are not merely wealthy but have large capital assets that they realise in the form of capital gains, and take advantage of the maximum taper relief, could also pay as little as 10 per cent. The 10 per cent. rate has gone for wage earners but it remains for unearned income and for capital gains. We saw a good practical illustration of that the other day. When Sir John Ritblatt stood down as chairman of British Land he described frankly how he had been able to benefit from the Chancellor's tax relief. He had gained about 20 million simply by being able to take advantage of the reliefs on the large share portfolio that he held as chairman of that company. There are beneficiaries of the Government's tax changes, but they are not the people about whom the Government should primarily be concerned.
	I have one more point about distribution and fairness. We know that the Government have laboured for 10 years to produce changes and alternatives to the council tax system. We have had the Lyons report, which runs to about 600 pagesI do not know whether anybody in the Chamber has actually read it yet. The report offers the Government two alternatives. One is to change the system radically in a way that reflects ability to pay, but the Government clearly do not want to go down that route. They were offered the alternative of ameliorating the system somewhat by changing the number of bands. It is striking that we have heard not a peep about how the Government propose to respond to the Lyons report, if at all. Their most regressive tax has been laboured over and endlessly reviewed, but at the end of the day the Government have absolutely nothing to say about it.
	In terms of greenness, it is clear that there are some changes which, as far as they go, are perfectly welcome and are things that we have advocated. We would argue for a much wider band of vehicle excise duty rates, along the lines recommended by the all-party environment group. The Government have made a small move in that direction and we have no question about the principle of vehicle taxation. However, we are more critical about what they have been doing in respect of the aviation sector. It has long been realised that airlines pay nothing remotely like the amount of tax they should, for a variety of reasons: partly because of pollution and the absence of any form of fuel duty, although there are of course good treaty reasons for that; partly because the slots available to them free of charge take no account of the externalities and congestion involved; and partly because their landing charges are cross-subsidised. For a long time there has been a powerful case for significantly increasing and changing the nature of taxation on aviation, but in a very cack-handed way the Government have introduced ticket duties that have caused a great deal of damage to small tourist operators because of the retrospective way in which they were applied.
	The more important economic point is that the tax bears absolutely no relation to the environmental impact. Charges are on tickets rather than on aircraft. We have the absurd phenomenon that in Mr. Stelios's Easyjet, full to the gills, every passenger pays the full air traffic duty, whereas half-empty flights leaving from major airports pay far less tax because it is levied per passenger rather than per aircraft. It is a highly inefficient, environmentally ineffective form of taxation and needs to be radically changed if the Government are really serious about environmental impacts.
	My third question is whether the Budget has introduced more simplicity. The answer is yes in some respects, and that is welcome. We have got rid of a rate of direct taxation, which is desirable. The alignment of national insurance and income tax is a difficult reform, for which tax reformers have long argued, so it is welcome that the Government are moving in that direction. It is also welcome that they have embraced at least the principle of cutting corporation tax and reducing allowances.
	However, in some respects the simplification is not workingor not working satisfactorily. I wholly identify with the comments made by the Conservative spokesman, the hon. Member for Hertford and Stortford (Mr. Prisk), about the impact on small business, which will lose about 850 million as a result of the changes to incorporation. Corporation tax on such businesses will rise in effect from 19 to 22 per cent. and they will receive only a proportionwe do not know how muchof the new capital allowance. There will be damaging effects for them.
	Where the tax system is inherently complicated there are the severest problems. My hon. Friend the Member for West Aberdeenshire and Kincardine (Sir Robert Smith) rightly raised the appalling problems that are being created for North sea oil revenue. The Secretary of State dealt with them at some length, so I shall not rehearse all the arguments. The key point is that the Government cannot entirely escape responsibility for the collapse in revenue. Tallow, one of the operators, describes the current tax rate, subsequent to the supplementary tax of two years ago, as punitive relative to the vast increase in costs. I think costs have risen by several hundred per cent. in the North sea. Another operator, Premier Oils, says that it no longer makes sense to develop the fields. It is not as though the situation was not foreseen. The Liberal Democrats opposed the tax increases; my hon. Friend the Member for West Aberdeenshire and Kincardine spoke eloquently and at great length predicting exactly what has now occurred.
	Complex tax changes are involved in another area where they are bound to have negative impacts: the provisions relating to management service companies and IR35. The Conservative spokesman did not mention it, but we argued the case several years ago. I can understand where the Treasury is coming from. There are undoubtedly people who abuse the system. There is evasion of national insurance and we understand that the Revenue has an obligation to try to deal with it, but our practical experience is that the Government's actions, unless they are carefully calibrated, will be completely counter-productive. Although there are people who cheat, hundreds of thousands of people need to operate on flexible contracts. Unless the tax system captures that there will be considerable costs. I shall give some examples.
	Grant Thornton, the tax adviser, has already warned that one of the knock-on effects of cracking down on contractors will be a big increase in the cost of the Olympics, because the project will be financed by flexible contractors. If we lose them, the costs will rise. The main user of flexible contract workers is the NHS, whose costs will rise if the Government get things wrong. Public sector IT contracts are already escalating out of control and that situation could be seriously aggravated.
	Although the Government can reasonably claim that they have improved the tax system through simplification in some respects, there are many areas where they already have caused, or will cause, serious damage.

Mark Prisk: The hon. Gentleman rightly points out the difficulties. Is he aware that the Professional Contractors Group has been involved in about 1,200 cases brought by Her Majesty's Revenue and Customs? Is he further aware that of the cases that the Government have prosecuted only three have been successful? Given the Government's claim that the measure would be a marvellous way of drawing back tax revenue, does he agree that in fact it has proved to be completely misguided?

Vincent Cable: The figures that the hon. Gentleman has mentioned are telling and I am sure that they will be used in the debate. Unfortunately, PCG lost its major test case several years agootherwise many of these problems would not have arisen.
	I want to finish with a couple of remarks about the broad economic picture, which I have not referred to. It is obviously clearI have always acknowledged this; there is no point in denying itthat the British economy is in good shape. It is growing and stable, and we have relatively low inflation. However, there is a danger of getting too carried away with that idea, and the Chancellor tends to do that. It is worth remembering that, although our performance in growth terms is relatively good against the big G7 countries, particularly in Europe, if we compare it with all the countries of the Organisation for Economic Co-operation and Development, the picture is much less flattering. Indeed, we are 22nd out of 27 EU countries in terms of economic growth, because the small countries are much more dynamic.
	We also need to remember why, although the Chancellor talks a good story about economic performance, it is clearly not appreciated at street level. At the moment, people's real disposable income is being squeezed. People are experiencing a real reduction in their take-home pay, because the rate of inflation, which has spurted and is now at its highest level for something in the order of 12 or 13 years 4.5 per cent. more in the retail prices indexis considerably greater than the growth of earnings. People's take-home pay is being squeezed. That is how people perceive economic performance.
	There are also two major problems looming up with which the Chancellor's successor will have to deal. They are not easy. The first is the big squeeze that the Government envisage in respect of public spending. I do not want to exaggerate it. The Institute for Fiscal Studies captured it very well: in the Government's period of office, public spending growth has moved from famine to feast to diet. Whether that diet is painful depends critically on what happens in respect of the so-called Gershon efficiency savings. The Government are making some heroic assumptions about the ability to deliver improved front-line services through efficiency. I hope that they succeed, but the problem that the recent National Audit Office study identified is that, of all the savings in efficiency that the Government have claimed, they can verify only 25 per cent. The rest are either non-existent or cannot be traced. That is a pretty damning indictment.
	The other area where the public spending squeeze will be more painful than is currently appreciated is in relation to the knock-on costs of a lot of the hire purchase agreementsnormally called private finance initiativesthat are feeding their way through the system. It is striking to look at the table in the Red Book showing the current PFI contracts. Half of them are in the Ministry of Defence, which is not an obvious area for PFI negotiation. Essentially, the Ministry of Defence is purchasing services on an HP basis. That is already taking up 4 per cent. of its budget and it has another 50 billion of contracts on the way. In that way, it is postponing the choice between front-line military services and military equipment, but that will have to be facedand it will be brutalwhen the comprehensive spending review appears in a few months' time.
	My final point is about stability. Of course we have had economic stability and let us hope that it continues, but there was a revealing comment last week from Eddie George, looking back retrospectively on the period that he spent chairing the Monetary Policy Committee. He acknowledged that, in order to save the country from a serious downturn in 2000-01, he and his colleagues had injected monetary expansion into the economy, the consequence of which was a major bubble in debt and in the housing market. He used the phrase, This is not sustainable. If we look at the figures, it is all too clear why it is not sustainable. House prices in relation to disposable income have doubled in the period since the Government came into office. That is exactly what happened in the period between 1982 and 1988. This is a cyclical and unstable market.
	I do not want to predict doom and gloom; I have no idea what will happen, but at the very least the Government should think ahead about a scenario in which things go badly wrong, debt becomes unsustainable and the market deflates. They should talk to the banks about how to handle the large number of people who may well find themselves having mortgage payment difficulties. The numbers are already growing rapidly. There are no safety nets, because the right hon. Member for Hitchin and Harpenden (Mr. Lilley), when he was the Minister with responsibility for social security, removed social security support. The argument at the time was that the gap would be filled by insurance in the market. That has not happened. People are not protected if their incomes disappear and they are made redundant. We are going to face large numbers of people who are in great distress and who are unable to service their debts. At the very least, the Government should give an indication that they are thinking ahead about how to handle a problem that in the medium term could be the most serious threat to stability.

David Anderson: I welcome the Budget, but I have a few points to raise about issues of concern. We need to look at exactly where we are. The truth is that employment has risen by over 2.6 million since we came into office. We have the highest employment rate in the G7 economies. The new deal has helped nearly 900,000 young people into work. The adult rate of the national minimum rage will soon be 5.52 an hour and the national minimum wage will be 4.60 for young people. But those of us from areas that have suffered economic deprivation over the last 20, 30 or 40 years, are watching closely to see the impact of the Budget.
	I accept the points raised by the Opposition about the impact of the 10p rate being removed and also about the issue of working tax credits. Working tax credits themselves are a good thing. If they are not working properlyas in far too many casesthey do not help. If they help, it will be true that, by 2009, a family with two children will, in effect, be able to earn 24,000 before paying tax. That is a good thing. However, it behoves the Government, the Treasury and the Department for Work and Pensions to make sure that the tax credit system is sorted out and worksfor the benefit of people outside and of our party and our Government.
	The TUC brief was clear. The TUC said that it believe that, as a result of the personal tax changes, by April 2009 families will be at least 200 a year better off. The poorest fifth of the population could be 50 better off. A single earner, on median earnings, with two children could be as much as 500 a year better off. But that will happen only if we get the tax credit system right. That is a challenge for our Government. Child poverty figures will be 200,000 lower. It is welcome that 600,000 fewer pensioners will pay income tax. It is right that only 43 per cent. of pensioners will pay tax.
	I want to talk about what is happening where I live. In 1986, I worked in the coal-mining industry in a village where male unemployment was 19.6 per cent. Then the pit was shut and 720 men were sacked, so the situation got even worse. Today, unemployment is 3.7 per cent. Even going back to 1997, there has been a drop in unemployment of 57 per cent. since then. Two years ago, the jobcentre was knocked down so that a factory that builds earth-moving equipment could be extended. That is a great sign of progress and we should all welcome it.
	I want to move on to education and, in doing so, I want to try to answer the questions that the Opposition have asked over the last four or five days about where the money goesa theme I want to come back to. The truth is that education spending will rise to 90 billion by 2011the highest level ever. Spending will be increased from 4.7 per cent. of GDP in 1997 to 5.6 per cent. in 2011. Surely we should all welcome that. Because of that increased investment, we will be able to provide one-to-one tuition for 600,000 children, to double apprenticeship numbers to 500,000 and to increase higher education student numbers to 1.2 million. We will be able to make every school an extended community schoolthe schools are up for that. We will be able to increase spending from 2,500 per pupil in 1997 to 6,600 in two short years from now. Surely we can all say yes to those figures.
	We have to welcome the Government's commitment to implement the Leitch review. We all know that there is a skills shortage in this country and that we must up skill our adults to ensure that they can compete in the global world. When the Bill to achieve that comes before the House, I hope that it will receive cross-party support. We should welcome the fact that there will be 3,500 Sure Start centres in this country in the next two years. We will also increase the amount of education received by three and four-year-olds to 15 hours a week.

Graham Stuart: The hon. Gentleman's passion for education and support for increased investment is clear to the entire House. Does he feel betrayed by the breaking of the promise in the Labour manifesto to increase the share of national wealth spent on education, which the Budget fails to deliver? By 2011, which is the year that he cited, the proportion will not have increased.

David Anderson: I could argue about the figures, but I will not because I do not have time. The reality is that the spending will be more than it was when we came to power. It will represent 5.6 per cent. of gross domestic product90 billion. I wonder what the amount would have been if the hon. Gentleman's party had won in 1997. It would have continued going backwards, as it did when the Conservatives were in power.
	We have been successful locally. I will probably bore people to death by telling them what has happened on the ground, but I do not mind that. Let me point out the A-level pass rate in five comprehensive schools in my constituency. The pass rate at Whickham comprehensive school is 98 per cent. It is 94.4 per cent. at Hookergate and 100 per cent. at Ryton comprehensive. The rate is 100 per cent. at St. Thomas More and 97.1 per cent. at Lord Lawson of Beamish.
	Let me turn to O-levels. In 2005, Gateshead was ranked as the eighth best performing local authority in the country with 65 per cent. of pupils achieving five passes at A to C. Last year, nearly 70 per cent. of pupils achieved those grades, which made Gateshead the fifth best authority in the country, with a figure well above the national average of 59 per cent. The percentage of passes at A to C increased at Hookergate from 39 per cent. to 52 per cent. The figure at Lord Lawson stabilised at 78 per cent. The rate increased at Ryton from 59 per cent. to 62 per cent. At Whickham, the figure increased from 78 per cent. to 84 per cent. Unfortunately, the rate at Thomas More stayed the sameat 100 per cent.! We should all be proud that those people are getting more than five O-levels.
	Our primary schools have achieved results that are well above the national average. Whickham Parochial school is the third best school in the country for top 200 scores at level 5. Results in maths, English and science are above the national average. Our primary schools are ranked 26th in the country for added value, and we will open seven brand new schools in the next year. That is where the money is being spent.
	I come to another non-contentious issue: the health service. The Tories say that there was no mention of health in the Budget, but there was. The Chancellor said that there would be 8 billion extra. Yes, that 8 billion had already been announced, but it will be spent in the next yearan extra 10 per cent. spent on health. That will go towards the trebling of health spending since we came to power in 1997, which was in the manifesto. The NHS now has a work force of 1.36 million, with 300,000 more employees than in 1997. Vacancy rates are at an all-time low.
	I have great concerns about the people who have lost their jobs in the health service. I was a president of Unison, which represents more health service workers than any other union in this country, so I have a right to be concerned. Last year, there were 1,446 compulsory redundancies. That was far too many1,446 too manybut it was not the 21,000 nurses that the Tories were talking about last year. That really was a con trick.
	There is no doubt that Ministers and managers in the health service need to get their act together, because what is happening in the health service is not by any means in order. They need to put the health service right. However, the fact that there are 100,000 more nurses and doctors than there were in 1997 is a success. It was a failure that nearly 300,000 people were waiting for operations in 1997, but it is a success that no one now waits as long as people did then.

Kevan Jones: Does my hon. Friend agree that another welcome change from those dark Tory days is that we have not had a winter beds crisis, which used to be an annual event under the Conservatives?

David Anderson: My hon. Friend and parliamentary neighbour is absolutely right. Phrases such as winter beds crisis and waiting on trolleys have gone out of the vocabulary. When did we last see anyone waiting on a trolley? That does not happen any more because people are looked after straight away.
	We are asked, Where's the money gone? Pay has gone up. Nurses' pay has gone up by 61 per cent. in 10 years, or 27 per cent. in real terms. The pay of support staff has gone up by 67 per cent., or 32 per cent. in real terms. That is welcome, but I need to say something to my Government: phasing this year's pay rise is out of order. That is not what the nurses and health professionals of this country expect or deserve. The pay review award should be paid in full. Health workers deserve no less, and to pretend otherwise is an insult. Go back, please, and look at this again, or we could be facing real problems in the NHS.
	Where has the money gone locally? I am sorry, but I am going to bore hon. Members again. New facilities in Gateshead include the Bensham walk-in centre, which opened in 2004. A new medical practice in Teams opened in 2005, as did an out-of-hours service for people not registered with a dentist. New pharmacies have opened and a low-vision centre has been set up. Retinal screening for people with diabetes has been improved. There is a new condom distribution scheme and a health trainers project. We have a triage service in paediatric speech and language therapyI could use it! New facilities in Blaydon include the new Whickham cottage medical centre and new GP practices, with two additional GPs. There are new facilities in Chopwellthe Pioneer centreand new optometry practices in Crawcrook and Birtley. That is where the money has gonebut that is not all.
	The money has also gone on increasing staff numbers. We had 147 doctors in 2002, yet we had 161 in 2005. We had 135 GPs in 2002 and we have 146 today. There were 574 non-medical staff in 2002, but 793 in 2005. We had 74 qualified allied health professionals in 2002 and there were 102 in 2005the list goes on. Hon. Members will not be surprised that while we had 29 managers and senior managers in 2002, we now have 55that is the group that has seen the biggest growth. What are they doing?
	Let me move on to pensions. I have spoken to Age Concern and I addressed a conference of the National Pensioners Convention yesterday. Age Concern's briefing said clearly:
	Significantly while Gordon Brown has been Chancellor the number of pensioners living in poverty has been reduced by almost 2 million.
	Those are the words of Age Concern; they are not my words or those of the Labour party. It is good news that the point at which over-65s will start paying tax will increase and that no pensioner aged over 75 will pay tax on income under 10,000. It is also good news that the financial assistance scheme will be extended and that, at last, all the affected workers will access some help.
	I want to raise again the major challenges on pensions with my colleagues on the Front Bench. We must address the problem that 2.1 million people who are entitled to receive pension credit do not claim it. If people will not claim personally, we should go to them. As Lyons recommends, we should set up a one-stop shop with a single telephone line through which people could access pension credit. If the Government wish to argue that the basic state pension cannot be increased beyond its existing rate and that pension credit is the way out, we must make pension credit accessible.
	The Government are committed to restoring the earnings link in 2012, if the circumstances are right. We cannot wait until 2012. My Government should support Labour party and TUC policy and reintroduce the link before the end of this Parliament. We all know the history of the breaking of the linkit was done by the Conservative party for political purposesbut if we wait until 2012, 3 million of today's pensioners will be history, and that would be unfair to them.
	Winter fuel payments have remained the same for the past two, three or four years. Since 2003, however, gas prices have gone up by 87 per cent. and electricity prises have risen by 56 per cent. We will miss our 2010 fuel poverty target if we do not address this problem. Earlier this year, Ofgem estimated that 4 million households will be in living in fuel poverty by the end of this winter. Just four years ago, the figure was only 2 million. We should look again at increasing the heating allowance by 100 for next winter.
	I want to talk about elderly people living in care. The period during which I worked for Newcastle city council as a care worker was one of the most rewarding times of my life. Some 280,000 people living in care homes receive a personal expenses allowance of 19.60 a week. That is absolutely pitiful, and we should support Age Concern's campaign to raise that amount to 40 a week. All those proposals cost money, but it is money that would be spent on the most vulnerable in society. I urge the Government to work with the National Pensioners Convention, the TUC, Age Concern and the dedicated people who care for the elderly to try to put the matter right.
	I have listened all week to the Opposition parties crying out about a con trick, and I ask myself whether they listened during the Chancellor's speech. Yesterday, I read an article by Anatole Kaletsky in  The Times, which said:
	The con-trick criticisms are mostly spurious. The Chancellor was unusually straightforward in stating, at the very start of his speech, that this Budget would be broadly neutral, with no room for any net tax reductions. It was therefore perfectly clear that any tax cuts announced would be matched by increases elsewhere in the system. All the main tax increases...were presented straightforwardly and were clearly costed in the Treasury's Budget documents.
	Those are not my words. He continued:
	The fact is that Mr Brown delivered exactly what most economists, tax experts and business lobbyists had long been demandinga simplification of the tax system combined with an improvement in its efficiency, achieved by reducing marginal tax rates and simultaneously broadening the fiscal base.

Theresa Villiers: How can the Budget be a simplifying measure if it drives so many more people into the tax credit system, which everyone agrees is complicated?

David Anderson: The hon. Lady should write to  The Times and ask Anatole Kaletsky that. To give credit where credit is due, someone did listen to the Budget: the leader of the Liberal Democrats clearly listened, and to his credit, he picked up straight away on the 10p issue. Perhaps the old Etonians were not listening; perhaps they were too busy writing their next joke about Stalin and trying to take the mickey out of the Chancellor, but it is clear that when the country comes to make a choice, people will stand up and say, We will support a strong leader who is not frightened of the civil service, and who is fair. They will not entrust the economy of the nation to Lord Snooty and the Bash Street Kids.

Kenneth Clarke: I refer the House to my entry in the Register of Members' Interests. In case anyone has any unworthy thoughts about whether my outside interests will affect my judgment in making my speech, I assure them that they certainly do not. Having put that behind me, let me say that I think that I have listened to my last Budget speech from the current Chancellor. I have listened to 10 of them, and they are a fairly bewildering collection; he has had some fairly dull ones, and some odd ones. This was probably one of the most political that he has made. I suppose that he lived up to my constant expectation that he will surprise everybody. On this occasion, as I shall try to illustrate, his mind was fixed on headlines and politics, not on a responsible policy on public spending, and tax and spend. That distorted his judgment in ways that I shall seek to explain.
	Perhaps it is time to reflect on the Chancellor's legacy. Of course I do not claim that he has been a bad Chancellor. The economy continues to perform reasonably well, and we keep adding to the number of years and quarters in which we have enjoyed growth with low inflation, and I congratulate him on that. The four such years that he inherited have had about 10 years added to them, and we have no idea when they are likely to come to an end. However, our performance has not been remarkable compared with that of many other countries, so I do not think that the eulogies that are sometimes heaped on him, and the claims that he is a remarkable Chancellor, are thoroughly deserved, but he has been a good, average Chancellor, and he has certainly performed better than an awful lot of Labour Chancellors.
	I attribute his 10-year record to a combination of the legacy that he was givenhe inherited an economy that was in good shape, and that was enjoying a run of growth with low inflationand a remarkable degree of luck, which is something that every Chancellor needs. The fact is that the global scene has been remarkably benign throughout his period of office. Most Organisation for Economic Co-operation and Development countries have enjoyed fairly unprecedented periods of growth with low inflation. The nearest that he got to a global crisis was when the dotcom bubble burst in America, causing great problems in 2000-01. That crisis was averted, as the hon. Member for Twickenham (Dr. Cable) rightly said, by an influx of liquidity hastily put into the system by Alan Greenspan in the United States and Eddie George in this country. Otherwise, the background has been one of increasing globalisation, which has been extremely beneficial. It has made it much easier to achieve growth with low inflation, because it means that there is downward pressure all the time from low-cost competition from around the world.
	In addition, the supply-side reforms of the Thatcher and Major years have begun to feed through steadily, and we find ourselves far more able to adapt, as an industrial economy, to the rapidly increasing amount of change taking place in the global economic climate. The result is that the Chancellor has presided over a reasonably benign scenario.
	There are always fragilities, and there are considerable ones in the present situation. It is well for the Chancellor's successor to have an eye to the risks that we face that might stop the current period of growth with low inflation. Some of the unknowns are global ones utterly beyond the control of the British Government, such as the question of what will happen to the American economy over the next year or two, after the remarkable sudden collapse of America's housing market, and given a likely reduction in consumer demand there. There are political problems throughout the world and our situation is not good, either. If I were asked why we are sustaining a reasonable level of growth, I would answer that it is dependent to a remarkable extent on the huge number of immigrants who have come to this country from eastern and central Europe in the past year or two. That has brought in a very industrious work force, but it has probably had more effect on the growth of the economy as a whole than on gross domestic product per head, in terms of improving our performance. The other thing sustaining our present level of growth is the rapidly rising level of public spending, which has not yet begun to slow down.We are too dependent on those two factors.
	I will not repeat all the figures that my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) gave at the beginning of his excellent speech to show how our underlying competitiveness in the global economy has steadily deteriorated in recent years. To pick out just one of the indicators that he used, I think that one of the starkest indications of our decline in competitiveness is our balance of payments position. I remember the years when a ridiculous amount of attention was paid to monthly balance of payment figures. Governments changed if the figures went wrong in the wrong month, in the run-up to an election. Of course, the balance of payments figure is only one among many, but our balance of payments now is the worst since records began. It continues to deteriorate and we have to go back hundreds of years to find a similar position.
	The balance of payments is a good measure of competitiveness, because it indicates that people overseas find it much easier to sell their goods and services in this country than we find it to sell our goods and services in outside markets. We are not in a particularly competitive position. That is the background to this year's Budget.
	The Budget certainly surprised me, because I thought that it was fairly obvious that we would have a low-key Budget, as there was really only one subject that the Chancellor had to address. One of the big weaknesses in our economic performance is the fact that the Chancellor has made a dreadful mess of the public finances. Nowadays, the stability and growth to which I referred depend to a considerable extent on the performance of the Governor of the Bank of England. During the Chancellor's period in office, there have been two Governors, who have performed their task excellently. Of course, I congratulate the Chancellor on his excellent decision to make the Bank independent, but the fact is that responsibility for the health of the public finances is now a bigger part of the Chancellor's role, and he has got himself into an ever deeper mess on public finances. We are still running substantial deficits, and he still fails to forecast the size of those deficits successfully.
	Recently, there have been some very good years for growth, and if we had any sensible fiscal rules, such as the one that I held, which was to ensure a balanced Budget over the cycle, we would run a surplus in the current good years of the cycle; that is what we should do if we are to achieve any kind of sensible health in public finances in the longer term.
	I shall not bother with the Chancellor's discredited fiscal rules, which he always tells us he still adheres to, having so manoeuvred the goalposts over the years that they are rendered completely and utterly meaningless. The fact is that we are running an unstoppable deficit and he had to address it. Everybody knew that and, to be fair, he has done so in the Budget, though he certainly tried to bury it.
	The right hon. Gentleman has been a tax-and-spend Chancellor on a colossal scale since his Pauline conversion back to taxing and spending in about 2000. He came into office saying that he abhorred the whole idea of being a tax-and-spend Chancellor, and he was extremely severe in his first few years. When he was following my figures, as he always used to say, he finally got the level of public spending in this country down to 37.1 per cent. of GDP in 1999, but in 2000 he began to expand public spending on a grand scale, and he began to increase the tax burden and public borrowing greatly as well.
	The result is that the budget deficit was troublesome and needed to be addressed, and no sensible fiscal rule could be hit over the next cycle unless something started to be done with that deficit now. We have reached a situation in which tax, in terms of the tax burden and the tax take from the GDP and spending levels as a proportion of GDP, have been taken back to levels that we have not seen for about 20 years, since the early years of the Thatcher Government.
	The difference between the position of the present Government and the Thatcher Government in the early 1980s is that the Thatcher Government had inherited a fiscal crisis from their predecessor, and Sir Geoffrey Howe made determined efforts to get it under control and to get budget deficits and public borrowing requirements on a downward path, whereas this Government have presided over a steady growth in the level of public debt and are belatedly, after many years of warning, finally realising that they have to address that.
	So the Chancellor has got himself into a position where he had to increase taxation and he had to announce more controls on public spending. It was plain as a pikestaff to everybody looking at the principal problem facing the Chancellor of the Exchequer when he came to the House that he had to do those two things. On tax, I regret that he had to do that. I would have controlled public spending very much earlier than the Government have started to do so.
	I did not think the Chancellor would raise taxation in his Budget because he had done what he always does nowadaysget that out of the way in the pre-Budget report before Christmas. He now makes a regular habit of that. The pre-Budget report, which started as a process, allegedly, of consulting for the Budget to come, is now a lesser-noticed occasion on which he tucks away bad news that he does not want to save up until he makes the major speech in March. In that pre-Budget report he raised 2 billion-worth of extra tax revenues.
	If we take not only the last pre-Budget report, but the last two pre-Budget reports and the 2006 Budget, we can see that the Chancellor has raised 6 billion- worth of extra taxation. Hence he has got the tax burden on the economy as a whole up to a near record-breaking level. As has been pointed out, in this Budget he added a further 1 billion to the burden of taxation on business. I shall return to that in a moment.
	Tax was not the Chancellor's principal concern. I waited for more news on spending, which is the key thing. There is, of course, the comprehensive spending review. The Chancellor is trying to impose on his successor much tighter controls on the level of public spending once he is out of office than he has ever been prepared to accept since 2000. It is a strange comprehensive spending review, because it keeps being put out in dribs and drabs to make bits of it sound more attractive than they otherwise would be.
	To be fair, the Chancellor has added to our knowledge of the expectations for the growth of public spending under a Brown Government. It will be sharply reduced. It will be reduced below the likely level of growth of the economy as a whole, which Conservatives from the Front Bench, and I, and others from the Back Benches, have been urging for a considerable time. It is called sharing the benefits of growth. That is what he is doing. We now know that over the next three years, the growth of total public spending will be, in real terms, 2 per cent. per annum, well below trend growth of the economy and, if we are lucky, assuming that benign conditions continue, well below the likely actual growth rate that we will achieve.
	So public spending as a proportion of GDP will at last start coming down again, though in fact, on the Chancellor's own figures, it will still be above 40 per cent. at the end of the three-year period, so the reduction is not as drastic as it should probably be. I always aimed to get it below 40 per cent. and the Chancellor followed that target when he first came into office.
	The other announcement that the Chancellor made was about education. We now know that the growth in education spending will be, in real terms, about 2.5 per cent. over the next three years. That is a very sharp reduction in the growth of education spending, which has been at about 4.5 per cent. in real terms in previous years. Following on from the remarks of the hon. Member for Blaydon (Mr. Anderson) in his very good speech, which I have the pleasure of following, that seems to me a reduction in the proportion of GDP being spent on education, as it is likely to be below the growth in the economy. I seem to recall that at the last election, the Government were pledging the reverse, as has been pointed out.
	We have very sharp falls in the rate of growth of public spending. I do not dispute that. It is long overdue. We should not have had a period of famine followed by feast followed by famine, or by diet. Given that the years of feast have resulted in the money being spent so badly and public authorities getting casually used to considerable increases in real-terms spending each year, I know of no policy direction that the Government are following that will help those who manage the services to cope with the sharp reduction in the growth of their budget.
	When I talk to people in education or the health service, they are completely unprepared for that. There is a slight tendency out there to believe that that cannot happen, after they have been buying their way out of trouble on most fronts so much for the past few years. The money has gone largely into payrolls, very considerably into pay increases in some important parts of the health service, and has mainly achieved a sharp drop in productivity in our key public services, without adequate improvement in the quality of service to show the hard-hit taxpayer.
	I do not understand how, if one looks back over the Chancellor's period, there is the slightest strategy in any of this. I have already said that I do not think the golden rule and the sustainable investment rule make any sense at all now. He has just responded to events. He first tried to build a reputation for prudence, then he panicked in 2000 and he and the Prime Minister started to throw money at everything. Now the public finances are in a mess and he is putting out in dribs and drabs the least damaging indications that he has of a slow-down in spending. Across the public service as a whole, that will cause great difficulties, some of which we already know.
	Maintaining a freeze on Home Office spending after years in which the Government have been doing their best to increase the prison population at a fantastic rate seems to me to be almost impossible. If the prison population continues to rise at the rate at which it has risen in recent years, as the Home Secretary has tried desperately to get the right headlines in all the most popular right-wing newspapers, it will merely mean a tremendous squeeze on spending in every other part of the criminal justice system, including the police, the probation service and the Courts Service. No doubt that explains the Prime Minister's sudden and remarkable conversion to the policy of reducing the number of people in prison. We will see that sort of thing across the board as the real impact of the comprehensive spending review hits public services, and the Budget has given us a few more of the details.
	Of course, the Chancellor did not confine himself to that. I had expected his speech to contain a great deal about the public finances and about how he had already covered the tax situation and would now cover spending, but that was not the sort of speech he wished to make on the eve of his translation to the office of Prime Minister, when he will have the pleasure of appointing a Chancellor of the Exchequer who can preside over the difficult nitty-gritty of returning the public finances to some sort of healthy state. Instead, he made a wholly political speech aimed, as far as I could see, at the next day's headlines. However, it did not even work on that front, because he only secured headlines of the sort that he wanted in the most gullible newspapers, which I strongly suspect had been briefed to look for a particular theme in his speech before he delivered it. The other newspapers, which were able to analyse it overnight, realised that it was not a great tax-cutting speech, but that was the political note on which the Chancellor wished to leave.
	The first thing that impressed me about the speech was that it was governed entirely by the Chancellor's position vis--vis my right hon. Friend the Member for Witney (Mr. Cameron), the Leader of the Opposition. The hon. Member for Coventry, North-West (Mr. Robinson) said that he admired a Chancellor who was not concerned by the up-and-down fluctuations of opinion polls. I do not believe a word of that. The Budget speech was written when the Chancellor had read some opinion polls and seen what his ratings were in relation to my right hon. Friend the Leader of the Opposition. He then decided on the old new Labour practice of triangulation, which the hon. Member for Coventry, North-West remembers only too well: he decided to go for what he believed were the strong points in my right hon. Friend's position. As he appears to imagine that our appeal depends on tax-cutting, he presented himself as the tax-cutting Chancellor, cutting income tax and business taxes in one and the same speech.
	I actually think that that was a slightly bogus view of where the Opposition stand. Personally, I admire my right hon. Friend the Leader of the Opposition and my hon. Friend the Member for Tatton (Mr. Osborne), the shadow Chancellor of the Exchequer, for being so responsible. We have said over and over again that we put the stability of the economy first. No one will follow this Government's period in office by being able to make quick reductions in taxation. Indeed, my right hon. Friend usually gets into more trouble through disappointing the more enthusiastic of our party's supporters by refusing to hold out the prospect of near-term tax cuts. The Chancellor of the Exchequer and the Government decided that the Chancellor would shoot a fox of some kindone that he, at least, saw coming out of the burrowby announcing himself as a man who would cut the rate of income tax and business taxationbut, of course, he did not do so. That was rapidly discovered, and has had some fairly perverse effects.
	I shall deal with the two principal issues. First, there is the cut in corporation tax. There is a caseindeed, many Conservative Members have been making itfor reducing the headline rate of corporation tax, which has steadily been left behind as all our competitors have reduced it, by making some cuts in allowances. We might have been given a little more explanation of how the impact would fall, however, because different sectors of the economy will be affected in different ways. There is no doubt that the move is of huge benefit to the financial services industry, but cutting all the capital allowances overnight will have been very unattractive to heavy manufacturing and the utilities, which will be very adversely affected.
	I agree with all the Members who have said that the most baffling aspect of the headline cut in corporation tax was that it had to be paid for in part by an increase in the small business rate of corporation tax. The Secretary of State for Trade and Industry did his best, saying, No, no, there will be no trouble whatever. He has set out the allowances, which some businesses can claim. It is true that some small businesses will be able to take advantage of the allowances, but he does not believe that they all will. A 3 per cent. increase in the small business rate is an extremely unattractive way of raising some of the money so that the overall burden of business taxation will still increase. The extra tax on small business raised 850 million, with the result that the burden of taxation on business is still rising while the Chancellor stands there trying to bask in the glory of being the man who cut corporation tax and taxes on business in his last Budget.
	The effects are even more perverse in relation to personal taxation. I always put my cuts in the standard rate in the last paragraph of the Budget as wellusually after I had put up a lot of other taxes. As a theatrical gesture, it is not original, but this one was neither successful nor very well concealed. Because the Chancellor wanted the headline about 2p off the standard rate, he has had little regard to how that redistributes between different sections of the population, especially given the other things he has done to the national insurance ceiling and the bottom rate of income tax.
	To an extent I welcome that, because the Chancellor has found a way of paying for it by taking from Peter to pay Paul, and some of the Pauls are quite deserving. One of the recent problems in our economy has been how few of the benefits of economic growth have got down to ordinary wage earners and workers on ordinary incomes, and they will benefit from a cut in the standard rate. A remarkable feature of recent years, which the Chancellor has not addressed, is that the disposable incomes of people in the middle bracket have hardly risen at allby less than 1 per cent. a yearduring the past four years of economic growth. It is worse than that. The discretionary spending available to the ordinary family on average earnings has dropped, because while their incomes have remained pretty much stable, they have found that bills they cannot avoid paying, such as council tax, utility bills and mortgages, are going up. The retail prices index, which covers the kinds of items that the ordinary family spends heavily on, has been outstripping the rising incomes of many ordinary families. They will benefit from this Budget.
	It is an inescapable fact, however, that low earners have suffered most. Couples and single people with no children in the lowest earnings bracket will be most out of pocket. Attempts have been made to compensate some people with children through tax credits. However, the take-up of child tax credit still cannot be got above 80 per cent. The system is fiendishly complicated, and I have always criticised it for that. I never predicted that the Revenue would get 50 per cent. of cases wrong each year, and I never expected to meet so many people suffering hardship and coming to my surgery, and those of other hon. Members, because they have received tax credits and then found that the Revenue is demanding from them thousands of pounds in repayments because of a mistake that it has made. I have never met a tax credits claimant who understands how the figure for their tax credits has been arrived at. It seems from the cases that I have dealt with that half the officials of the Inland Revenue do not understand how to get the calculations right.
	That is not a very good mitigation for taking away the 10p rate, despite the hon. Members for Coventry, North-West and for Blaydon trying to cheer themselves up when they reflected on the effect on lower-paid earners in their constituencies. There are plenty of two-earner families where the second earner cannot claim child tax credit even if they have children. I disapproved of introducing the 10p rate. It was a gimmick when the Chancellor introduced it. He used it for political purposes, and it complicated the system. I always looked forward to its being removed, but it has been done in an extremely cack-handed way. I assumed that it would be impossible for any Chancellor to increase the tax burden on lower earners again. I assumed that we would have to wait until we could eventually afford to freeze the ceiling and raise the threshold of the rate until the ridiculous invention eventually vanished. Doing it because he needed the headlines now will reduce the income of some very poor people next year.
	Who has benefited? It is no secret that I am over the age of 65. I never describe myself as a wealthy pensioner, although the capital value of my pension as a long-standing Member of this House is quite high, so I am fairly comfortably off. I have not done the exact calculation, but I think that I am substantially better off as a result of the Budget because I do not pay national insurance, nor does anyone else above the age of 65, so 2p off the standard rate is a useful benefit. Like everybody else, I have been getting more heavily taxed by the Chancellor, so any remission of that is gratefully received. However, I do not for the life of me understand why people like me are benefiting at the expense of those on low incomes, who earn at the level where the 10p rate was important to them. There is no rationale for that. For political purposes, the Chancellor has made headline-seeking announcements, which have a fairly arbitrary effect on businesses and individuals. That is no way to set about improving this country's public finances, and certainly not the best method of simplifying the tax system.
	I object to the current form of the Budget speech. I hope that the next Chancellor will go back to being a little nearer the rules for Budget speeches. The old rules were quite strict and made for boring long stretches of speech, but they required all tax changes to be properly explained. I must admit that I got away from some of that a little, by leaving things that were of interest only to accountants with a handful of clients to the Red Book. However, I did not do what happens now. The Budget speech used never to be a political speech that was designed to give a totally misleading impression to the next morning's newspapers. No Chancellor in the past attempted to gabble out figures at the rate that this Chancellor does, in a not unintended attempt to ensure that nobody can follow the Budget's precise impact on the public finances. The Chancellor switches from cash figures to percentage figures. The dates all come out in a tumble. It requires a miracle for anyone in the House to follow the details of the speech, because he wants us to hear the headlines of 2p off corporation tax and 2p off income tax. He is determined that no one in the House or the Press Gallery will understand any of the downside by the time he sits down.
	That is unhelpful and I fear for the Chancellor's reputation when he becomes Prime Minister. His good friend the hon. Member for Coventry, North-West did his best to protect him as an individual, and I have always acknowledged that I do not dislike the Chancellor as a man, but his political style puts him in serious jeopardy as he embarks on his next job. He is not charismatic and never will beI do not criticise him for that. He has the reputation with the public of being a political heavyweight. He scores well on trust and has been around for so long that he is almost part of the British constitution. He is a formidable figure in a Government of whom one cannot say that the entire Cabinet is composed of formidable political figures. However, the Chancellor's reputation has been sinking recently and the public's reaction to the Budget speech will be damaging to him. It was not the right farewell to his period as Chancellor to go in for a Budget that was a blatant attempt to mislead the public about what he was doing. Only the most loyal sections of the Murdoch press were inclined to buy it.
	I was looking forward to a period of more straightforward presentation of public policya little less spin, to use the clichand less of the extraordinary manner whereby information comes out of the Government, but the Chancellor, under the pressure of events, the pressure from my right hon. Friend the Member for Witney, and impending responsibilities, is showing signs of taking up new bad ways of disseminating information. It will not work. If he continues in that way, I am afraid that I wish him a premiership that is much shorter than his tenure at the Treasury.
	The Chancellor's successorI hope that the nationality of the Secretary of State for Trade and Industry is not fatal to his hopeswill have a miserable task in implementing what has to be done to the public finances. I trust that whoever it is will give us a much more straightforward and open Budget, with a candid account of what has to be done, this time next year.

Jim Cunningham: I was interested to hear what the right hon. and learned Member for Rushcliffe (Mr. Clarke) had to say. It sounded to me as if he wished he was in a position to deliver what the Chancellor is delivering. There is nothing wrong with admiring the Chancellor. In fact, the hon. and learned Gentleman has had his admirers, too. When he said that he thought the Chancellor was average, could he have been describing himself? He mentioned the Prison Service, for example, and prisons are pretty full, but I remember when Lord Ferrers was in Stoke Aldermoor in Coventry: his attitude was Bang them up. That was the attitude of the ex-Chancellor's Government and the general attitude to law and order.
	Under the stewardship of the previous Government, we certainly remember the lack of policemen, whereas this Government have increased police numbers. We can debate whether they are at the right or wrong levels, but we have increased the number of policemen on the streets, just as we have increased the number of wardens and assistant police officers on the streets, particularly in the inner cities.
	The right hon. and learned Gentleman mentioned opinion polls. Well, he alleged that this side of the House was obsessed with them, but his new leader is also obsessed by opinion polls and image. Reductions in tax were mentioned, so let me remind the right hon. and learned Gentleman about debates on 17 per cent. VAT on fuel. We had many a debate in the Chamber on a Friday morning about the 10 winter allowance, which the previous Government did not do much to putup. We should also remember the Conservative Government's record on the pensions linkthey actually broke the link. To hear Conservative Members on their high horses tonight, nodding their heads when people talk about restoring the link, is, quite frankly, nothing short of hypocrisy when they were the party that took it away.

Graham Stuart: Will the hon. Gentleman travel back in time to 1980 when the link was broken? At that time, this country was economically on the floor after years of failed socialism, so the Government were forced into making that cut. Will he at least recognise that Conservatives have for many years been campaigningI certainly haveto restore the link before 2012?

Jim Cunningham: What I remember about the 1980s is the destruction of the manufacturing industry of the west midlands, the 3 million unemployed, the capping of local government's capital programmes, schools being left to decay through lack of repairs and the loss of council houses. The hon. Gentleman should therefore be very careful about who he lectures about the 1980s. It is always worth reminding Conservative Members exactly what happened then. If the hon. Gentleman still wants to talk about the 1980s, let us talk about 15 per cent. interest rates and negative equity.
	Even more importantly, when Conservative Members get on their high horses about pensions issues and try to blame the Chancellor for present pensions problems, let me remind themand particularly the hon. Member for Beverley and Holderness (Mr. Stuart), who brought up the issue of the 1980sabout the mis-selling of pensions. I recall companies such as Rolls-Royce spending a lot of money trying to encourage people to leave SERPS and go into private pension schemes.

Geoffrey Robinson: Would my hon. Friend care to comment on another aspect of the issue raised by the Opposition: that after they broke the link, they failed to restore it in the following 17 years, whereas the Labour Government are committed to restoring it after nine, not 18, years in office?

Jim Cunningham: I certainly agree with my hon. Friend about that.
	When we talk about the mis-selling of pensions and the present crisis, I believe that one of the best things that the Government have done is to introduce the pension protection scheme. It is one of the most fundamental things that the Government have done, whereas the previous Government presided over a pensions disaster. So when we look at what this Government have done for pensions, the pension protection scheme is well worth taking note of, because 120,000 people will be able to benefit from it to the tune of 80 to 90 per cent. of their pensions. Certain companies such as Rover could have been excluded, but they are now going to be included. When people want to talk about who did what in the '80s and '90s and probably into the new century, they should be careful about what they say.
	I welcome the fact that we have one of the highest growth rates in Europe, no matter how people try to play with the figures. I also welcome the fact that there are more nurses and doctors now; although we have had difficulties in the health service, the situation is not as diabolical as the right hon. and learned Member for Rushcliffe tried to make out, because we can overcome the present problems. One of the problems in the health service is the change in the way in which finances are administered. We are going from an old culture to a new culture, which is payment by results. That will take time to feed through because we are changing from an old culture, which involved running deficits, to a new culture, where people get paid for what they buy. That is a fundamental difference and it will take time to come through. I welcome the fact that we have more schoolteachers than we have ever had, that they are better paid than they ever were, and that we have more new schools. We could go on all night about what the Government have or have not done, and other hon. Members have outlined the Government's achievements.
	I will finish on a local issue in Coventry, where the Royal Mail is to move its sorting offices to Northampton. As the hon. Member for Northampton, South (Mr. Binley) knows, I have nothing against him, but there is concern in Coventry about the quality of service that can be delivered from Northampton to Coventry, the times of postal deliveries and whether the 600 employees will keep their jobs. I do not think that the Royal Mail even has a site earmarked for a sorting office in Northampton. Conservative-controlled Coventry city council suddenly flipped its lid today, because it decided to support those Royal Mail workers, whereas it had been neutral.
	I shall finish with this thought about what the Conservatives might do if they were to get back into power. Coventry city council has withdrawn the 3 a day payment to people who have disabilities and are doing jobs. That gives people a good idea of what we can expect after the May elections and, more importantly, what might happen if the Conservatives were to return to power.

Edward Leigh: It is a pleasure to follow the hon. Member for Coventry, South (Mr. Cunningham).
	This is the last day of the last Budget of the present Chancellor. I was interested to note a few comments made in William Gladstone's first Budget speech on 18 April 1853comments which are strangely relevant to the present day and to what the Chancellor should be trying to achieve:
	These are the proposals of the government. They may be approved, or they may be condemned, but I have at least this full and undoubting confidence, that it will on all hands be admitted, that we have not sought to evade the difficulties of our positionthat we have not concealed those difficulties either from ourselves or from others; that we have not attempted to counteract them by narrow or flimsy expedients...While we have sought to do justice to the great labouring community of England by further extending their relief from indirect taxation.
	Those are useful lessons from some time ago for the present Chancellor. I wonder whether the House is absolutely convinced that the present Chancellor has not used the flimsy expedience to which I have just referred and that he has managed to make an effective cut in indirect or, indeed, direct taxation on what William Gladstone called the labouring classes, namely all of us nowperhaps not all of us, but most of us.
	The Public Accounts Committee was founded four years after that speech, so we are celebrating our 150th anniversary this year. Even in those days, and I hope even more so now, people appreciated the importance of parliamentary audit of the public finances as a key component in driving out waste and ensuring economy and efficiency. Over the years, I have attempted to convince others of my personal mantra. Sometimes it has been a lonely battle, but I remain convinced of its truth: in a growing economy with modest and costed efficiency gains, which are achieved through proper parliamentary audit, it is possible to deliver better public services and sustained and real tax cuts. That is my personal mantra. In a few minutes, I shall show how we might deliver that.
	For a couple of minutes, I want to leave our problems of affluence, as we are sometimes too self-regarding in this country, and focus on the problems of the poorest of the poor in Africa. I was reminded of that at a meeting here today at which I listened to Archbishop Ignatius Kaigama of Nigeria, who was talking about some of the problems that his country faces. The meeting was not that well attendedonly three other colleagues were thereand was part of the Catholic Fund for Overseas Development's campaign, Live simply so that others may simply live. We all applaud what the Chancellor has done conscientiously and correctly in the Budget to increase the amount of money that we, as one of the richest countries in the world, contribute to overseas development.
	The archbishop was telling us about what happens to our moneythat is where parliamentary audit is relevant, because the audit of public moneys in Nigeria is notoriously weakwhen it gets to Nigeria. He spoke of 100 million a year of our taxpayers' money going to Nigeria. Despite Nigeria's being the sixth largest oil producer in the world, and despite the generous provision for help that, once again, we will make to it today, the poor in Nigeria are getting poorer. They are getting poorer even in the Niger deltadespite and often because of overseas aidas a result of massive corruption, which is leading increasing numbers of people in this country to doubt the value of overseas aid. Rather than simply colluding with and congratulating the Chancellor on spending more on overseas aid, the Conservative party and others should put more pressure on him to ensure good civil governance, and that the money is properly spent.
	To return to parliamentary scrutiny and public audit in this country, efficiency gains are increasingly the key element in our debates. I am proud that the Public Accounts Committee has tried to play a part in that, in its modest way, over the past few years. The Committee is surprised that further efficiency gains were claimed in the Budget so soon after the National Audit Office report mentioned by the hon. Member for Twickenham (Dr. Cable). That impartial report by Parliament's auditors questioned the credibility of the figure previously claimedthe relatively modest figure of 13.3 billion. Therefore, if the Gershon claims are not in the bag, how credible is the Government's claim that they will have saved an additional 26 billion by 2011? How ambitious is even that claim given that, as we are repeatedly told, the public sector as a whole spends well over 550 billion?
	May I give one bouquet to the Government, and particularly to the Chief Secretary? I went to see him last year with the right hon. Member for Swansea, West (Mr. Williams) and a delegation from our Committee, and we requested more transparency. On 21 March, I received a letter from the Chief Secretary, in which he told me:
	We discussed last year transparency in the programme. Departments already account for their programmes and progress in their regular departmental reporting cycle. Reflecting the Committee's suggestion, I have decided at this time to publish a consolidated breakdown of departmental performance across the three areas of the programme (efficiency gains, workforce reduction and relocation), and to break this down by workstream and cashable element.
	I am grateful to the Chief Secretary, as we have got more transparency, which is important. If we are talking about 26 billion, let us think about what that could achieve.

Theresa Villiers: Is my hon. Friend concerned that some of the Gershon programmes have impacted negatively on service quality? In particular, I am thinking of his Committee's report on the number of calls that went unanswered at the Department for Work and Pensions following the switch to call centres as part of the Gershon programme.

Edward Leigh: Yes, that is a problem; it relates to an issue to do with cashable and non-cashable gains. We could have an entire debate on that. We need to have a serious debate on the impact of some of the Gershon reforms on public sector efficiency. If I may give a brief advertisement, let me say that there will be a Public Accounts Committee debate in a couple of weeks' time at which we can talk further about this important point, and I am grateful to my hon. Friend for raising it in her intervention.
	I was talking about the savings of 26 billion. That is an exciting promiseor promissory notegiven to us by the Government. It could reduce the basic rate of income tax by up to 8p in the pounda real reduction of 8p in the pound. Of course, the actual amount of that reduction would depend on the state of the economy at the time, but I offer that figure as a headline figure to show what could be achieved by efficiency gainspromised by this Government and audited by the Treasury. If we did not want to reduce income tax by 8p in the pound, we could build 860 schools or 130 hospitals, or use the money to reduce borrowing considerably. So that is an exciting claim.
	Efficiency gains are an essential aspect of the debate. They are becoming increasingly important, and they are doubly important because we need to restore public trust in respect of what is happening to all the extra money that we have put into the public services. A recent King's Fund studya reputable studyshowed that of the 19 billion that we the taxpayers have put into health, 6.6 billion went on pay, 2.2 billion went on the rising costs of drugs, 1.6 billion went on hiring more doctors to comply with new European Union employment laws, 1.1 billion went on new buildings, 1 billion went on medical equipment and 600 million went on negligence law suits. It showed that of the 19 billion, only 5.9 billion went on
	direct improvements, which included reduced waiting lists, greater use of day surgery, larger numbers of doctors, nurses and consultants, and elderly patients spending far less time in hospital.
	The debate has therefore changed, and it continues to change. We should be aware of thatI say that especially to my party. The public are becoming increasingly dubious about the claims of politicians that such large amounts of their own money are making a real difference. Indeed, we know that productivity in the NHS is declining.
	I pay tribute to my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke)a former Chancellorfor making a brilliant speech. It was a dissection of the Budget which I shall not even attempt to emulate because there is no need to, as the case has been made so well by him, and also by my hon. Friend the Member for Tatton (Mr. Osborne), the current shadow Chancellor. There is no need for me to repeat everything that has been said about matters such as the sleight of hand in the Budgetabout the giving and the taking away.
	We should however be aware of two aspects of the Budget which will make us aware of how the Budget is changing things. One of them is the Chancellor's apparent conversion to simplification by merging the tax and national insurance bands, for which I praise him. I accept that complications are also introduced in respect of tax credits, but simplification is the aim; that is the headline that the Chancellor wants the public to remember. The other key aspect of the Budget is the Chancellor's apparent conversion to cutting the base rateand therefore to tax cuts.
	That offers a challenge to Conservative Members. It will become increasingly difficult for the Government and the Chancellor now, in the next couple of years and up to the general election, to argue, as he has so successfully argued in the past, that tax cuts promised by an incoming Government will inevitably lead to worse public services. Such claims have been made to devastating effect in the past against my party. As a result of the Budget, they will be increasingly difficult to sustain.
	Efficiency gains and growth can ensure better public services. We should be aware of that at all times. After all, as my right hon. and learned Friend the Member for Rushcliffe made clear in his speech, the Chancellor wants to increase spending by only 2 per cent. in real termsby less than the inflation rate. Before I sit down, I want to make what might be considered a fairly radical suggestionthat we should limit increases in total public spending, once there is a new Conservative Government, to the rate of inflation. Even last year, that would have been considered a way- out, radical, right-wing suggestion, but it is one that the Chancellor himself has taken up. As well as limiting himself to only a 2 per cent. spending increase, he is promising at least 2 per cent. in efficiency gains.
	So there is a challenge for us. There is a real possibility that the new Chancellor of the Exchequer, whoever it may bewhether it will be somebody sitting in the Chamber at the moment or someone else, we do not know; we can only speculatewill be able to deliver very substantial tax cuts before the next general election. It is therefore important that my party be aware of that, prepare the ground and not wait for the general election to make its own promises, when, as happened in the past, they can be immediately rubbished. We should have the moral and intellectual courage to make the case for the state's taking a lower share of people's valuable earnings.
	As I said, public opinion is changing, and it is doing so because people are being taxed so much more. Because of the failure since 1997 to raise income tax thresholds in line with earnings, in excess of an additional 3 million people are paying income tax, and an additional 1 million are paying it at the higher rate. Whatever they might say to public opinion pollsters who stop them in the streets, and whatever focus groups might say about the apparent reluctance to trust politicians who offer tax cuts, those people are out there in very considerable numbers and paying more tax.
	The rise in taxes in both relative and absolute terms, and the well documented increase in the system's complexity, has had a damaging impact on families, incomes, jobs and businesses. Let us look at household discretionary income. The amount that families earn after paying unavoidable expenses such as taxes and household bills has fallen by 10 per cent. Beneath the surface, public opinion is changing faster than we political cognoscenti sometimes acknowledge. As the Chancellor may have sensed, perhaps the public are more interested in political parties that promise to relieve their burden of extra taxes.
	Members might dismiss my views as those of one Back Benchermeaning that they have no influence and do not matter. Do not listen to me, even for a second; instead, look at what is happening in other parts of the world. Since 1996, the Conservative Government of John Howard has carried out a major reform of Australia's tax system. Its four income tax rates have been reduced from 20, 34, 43 and 47 per cent. to 15, 30, 40 and 45 per cent. respectively. Income tax thresholds have been increased considerably; indeed, the top rate threshold has trebled: it now starts at 150,000 Australian dollars, which is more than 60,000. So the results have been dramatic and show that in one country, at least, it is possible over time to combine falling interest rates, falling unemployment and falling tax rates with increased tax revenue, increased growth, increased Government spending, budget surpluses and the elimination of Government debt. If it is possible in that country, is it so unbelievable that it is possible in others?

Kelvin Hopkins: If I heard the hon. Gentleman correctly, he suggested that the Australians have a top rate tax of 45 per cent., starting at 60,000. Is he recommending that for Britain?

Edward Leigh: It is impossible for me, sitting where I do, to give an absolute figure for what should be the starting point for paying top tax rates. Nobody can expect us Opposition Members to do that. I am saying that we should at least have an open mind on this issue, look at what is happening in other countries and realise that it is possible to make considerable progress on these fronts. If Members do not want to consider the example of Australia, which is a long way away, they should consider Ireland.
	In 1987, Ireland's economic position was precarious. It had stagnant growth, high unemployment, spiralling deficits and the International Monetary Fund threatening to intervene in the Irish economy. That sounds familiar: it happened a long time ago in our country before the reforms under Lady Thatcher and John Major. Ireland's 1987 budget began a process of major economic reform, cutting spending drastically to bring the deficit under control. The next budget reduced current spending by 3 per cent. and capital spending by 16 per cent. Those spending reductions were accompanied and followed by major and continuing tax cuts. Among others, the standard rate of corporation tax was steadily reduced from 50 per cent. in 1987 to 12.5 per cent. in 2003the lowest rate in the EU. Personal tax rates were steadily reduced from 35 per cent., 48 per cent. and 58 per cent. in 1987 to 20 per cent. and 42 per cent. in 2001.
	One might think that that was dramatic, and if anyone suggested such cuts here they would be dismissed as out of touch with reality or as coming from a right-wing think-tank, or criticised by Matthew D'Ancona in  The Sunday Telegraph. However, between 1987 and 2003, overall tax receipts in Ireland increased fourfold and corporation tax receipts increased 16-fold. That has allowed public expenditure to grow by 220 per cent., compared with a rise in the UK of 120 per cent. in the same period. I know that other factors were involved and we cannot entirely replicate what the Irish managed to achieve. Ireland, for example, has benefited unduly from receipts from the EU, but the fact is that the simple case is very interesting, and we should be aware of it.

David Taylor: The hon. Gentleman paints an interesting picture of alternative tax scenarios drawn from countries across the globe and across the Irish sea. He is known and recognised as one of the free, radical and independent thinkers of the Conservative party and it seems only a few months since that group was flirting with and promoting the virtues of a flat-rate tax. What is the present thinking on that in his party?

Edward Leigh: I am famously not in the loop, so I do not know. I was very heartened by what the shadow Chancellor said in his early days about the benefits of moving to a much simpler and flatter tax system. I agree with the shadow Chancellor that in a complex economy such as ours it is not feasible to do suddenly what the east Europeans did and move overnight to a flat rate of tax. It is a caricature of our position to suggest that that is what we advocated. The Chancellor presumably believes in a simpler tax system himself. Why otherwise would he have sought simplification in this Budget?
	Why is it beyond the bounds of credibility to suggest that a Conservative Government, over the lifetime of a Parliament, could move to a much flatter, simpler tax system, as suggested by Lord Forsyth, in an excellent, well documented paper? It showed, incidentally, that 21 billion of tax cuts were entirely deliverable. Of course, there was an attempt to rubbish that paper, with the same old arguments. Ministers trotted out the tired arguments that Lord Forsyth's tax cuts would scythe a horrible hole through our public services, when in fact 21 billion is within the margin of error.
	The point that my friend, Michael Forsyth, made to me on the phone when I was discussing flat taxes with him todayand I put it to my right hon. Friends on the Front Benchis that unless one reduces the overall burden of taxation, it is difficult, indeed impossible, to achieve flatter and simpler taxes without creating a considerable number of losers. Therefore, we have to have the courage as a political party to start arguing the case for a lower overall burden of taxation, because that is the only way in which we can make progress towards a much flatter rate of tax.
	I think that there is now an overwhelming case for change, and that the intellectual consensus is starting to change as a result of this Budget. People in all political parties are beginning to recognise that higher taxes are causing real hardships to families, and most of all to the poorest.
	That is where the moral case for lower taxes comes in. Too many caricature the argument as one that is posed by people who have no interest in compassion and who want simpler and lower taxes only to help the rich. The truth is that higher taxes affect the poorest and most vulnerable members of society to the greatest extent, and that is unfair and immoral.
	According to well-audited national statistics, the poorest 20 per cent. of households pay 36.4 per cent. of their gross income in direct and indirect taxes. That compares with 35.6 per cent. for the richest fifth, and 35.3 per cent. on average. The poorest people pay the highest taxwhat a ludicrous situation! That is where we find ourselves after 10 years of a Labour Government, who I accept are composed of people who are entirely honourable and personally committed to reducing the burden on the poorest. What is going on?
	I have set out the moral case for lower taxation. The PAC and other Select Committees have compiled numerous reports on the matter, and in his speech my right hon. and learned Friend the Member for Rushcliffe talked about the desperation that the poorest in our society face as they try to cope with overpayments in the tax credits system.
	According to tables A3 and A4 in the Budget statement, people have to start paying income tax and national insurance when they earn only 5,225 a year. That is scarcely believable. Do not people in this House agree that that is a most extraordinary state of affairs?
	In addition to the moral case for lower taxes, there is also a strong economic case, as I have tried to show with examples from around the world. A recent paper from the Organisation for Economic Co-operation and Development, speaking about the period between 1965 and 1995, concluded:
	Up to one third of the growth deceleration in the OECD would be explained by higher taxes.
	Although the US is not very popular in this House, I shall mention it as another example, as a report from the American Shareholders Association says that
	the US tax cuts of 2003 have already paid for themselves by around 50 per cent.
	I have set out the economic and moral case for tax cuts, and now I turn to the political casethe most important one for us politicians. I am constantly told that the public do not believe promises of tax cuts, that they have no appetite for them and that they want better public services. However, a recent ICM poll found that 71 per cent. of people believe that
	taxes have risen, we aren't getting value for money, and the people who suffer the most are the most vulnerable in society.
	In addition, 59 per cent. of people believe that
	if Britain reformed public services and cut waste it could lower taxes without having to cut spending on vital services.
	By contrast, the poll found that only 36 per cent. of people believe that
	lowering taxes would create damaging instability for the economy.
	I have shown that there is a moral and an economic case for tax cuts, and I have spoken of the importance of audit. Like the Chancellor, however, I want to make one final statement before I sit down. It is a bit of a parlour game, but why should I not play it?
	I want to make a suggestion about what we could do if the Conservative party were about to take on the ship of state and the shadow Chancellor were giving the Budget. It is so radical that the House will probably dismiss it instantly, but it does add up. I think that we should consider using the proceeds of growth to almost treble the tax-free allowance to 15,000, in today's prices, by the end of our first Parliament or over the next four years. In the process, we should abolish the starting rate of income tax.
	That higher personal allowance would apply to all taxpayers, including pensioners, and it would benefit senior citizens as well as people of working age. Currently, people of working age can earn just over 5,000 a year before they pay tax, and for pensioners the figure is just over 7,5000. However, if those people were able to earn 15,000 before paying tax, that would constitute a major improvement in the quality of life for all taxpayers. It is difficult for non-expertsfor MPs evento cope with long Budget statements, but if the personal allowance was raised to 15,000, more than 13.5 million people would no longer have to pay any income tax at all. That is more than the number of people who voted for Labour in the 2005 or 2001 general elections.  [ Interruption. ] I agreeI am not the Chancellor, I do not have all the books, and I am not suggesting that we should do all of that now. I am just saying that hon. Members can use the Treasury model and work it out for themselvesit is doable. If the personal allowance was raised, it would automatically raise the threshold at which people start to pay top-rate income tax. People start to pay the 40 per cent. rate when they earn just under 40,000, but raising the personal allowance to 15,000 in today's prices and abolishing the starting rate of income tax would mean that people could earn more than 47,000 in today's prices.
	That is just one example, but it is realistically achievable over a Government's lifetime if we take into account economic growth and efficiency gains. However, important choices have to be made, and that is where the painthe slight paincomes into my Budget statement. In recent years, the government sector has enjoyed record spending increases, which were mentioned by my right hon. and learned Friend the Member for Rushcliffe. Since 2000, the share of the economy taken up by the state has increased by 7.8 percentage points of GDP, which is faster than for any other country in the Organisation for Economic Co-operation and Development. The Government are literally awash with moneyand borrowed money, to be paid for by taxpayers now and in future.
	The expansion of government has gone far enough. We are suffering too much as taxpayers, and we should therefore consider limiting the annual growth of overall Government spending to inflation over the lifetime of the next Conservative Government. That is affordable and doable, and I commend it to the House. I do not think that it is going to happen, but I believe it very strongly. Before I conclude, I can only say that I stand by the words of Martin Luther:
	Here I stand. I can do no other. God help me.

ROYAL ASSENT

Mr. Deputy Speaker: Before I call the next hon. Member to speak, I have to notify the House, in accordance with the Royal Assent Act 1967, that Her Majesty has signified her Royal Assent to the following Act:
	Northern Ireland (St. Andrews Agreement) (No.2) Act 2007

Budget Resolutions and Economic Situation

Question again proposed.

Roberta Blackman-Woods: It is always an interesting and challenging experience to follow the hon. Member for Gainsborough (Mr. Leigh). May I begin by congratulating my hon. Friend the Member for Blaydon (Mr. Anderson), who is not in the Chamber at the moment, on a truly excellent speech? I wish that I had carried out a similar audit in my constituency of what has been gained under the Government, because I am sure that the gains would be as extensive, if not more so, than those in his constituency.
	I pay tribute to the Chancellor for the longest unbroken expansion on record, with GDP growing in 58 consecutive quarters, for stability in GDP growth, and for low inflation rates. All those things have put us in a strong position to respond to the global economic challenges that undoubtedly face us.
	There are a few points in the Budget that I want to emphasise. First, raising the higher personal allowance for pensioners is extremely important. Pensioners have come to my surgeryand I am sure that this is the case for many hon. Membersas they are concerned about their level of taxation. The measure to take 600,000 pensioners out of taxation is a very good one, as are the measures to increase child tax credit, to increase the threshold for working tax credit and to reduce corporation tax as well as the basic rate of tax. It is important, too, that vehicle excise duty has been increased, although personally I think that the Chancellor could have gone much higher in taxing gas-guzzlers, which have a negative impact on the environment. I am not sure that the current level of excise duty will deter sufficient people from driving them. Lastly, the rise in investment in education by 2.5 per cent. in real terms is an important measure to which I shall return.
	I want to stress the importance of science funding. We shall not be able to compete internationally unless we remain at the leading edge of scientific innovation and application, so I very much welcome the investment in knowledge-based and high added value sectors. I am particularly pleased that the 2007 Budget announced early the comprehensive spending review settlement for the ring-fenced science budget for the Department of Trade and Industry and for the Department for Education and Skills. Together, they will deliver annual average growth of 2.5 per cent. in real terms over the CSR period.

Graham Stuart: My understanding is that there will be a 2.5 per cent. increase, not 2.5 per cent. in real terms.

Roberta Blackman-Woods: My understanding was that it was a real-terms increase, which will, we hope, deliver excellent research.
	Our universities need stability in funding to invest in research. We need to increase the economic impact of our science base, and to implement the recommendations of the Sainsbury review, which is looking at the effectiveness of our science base and at the opportunities and challenges of globalisation.
	We know from the emerging conclusions of the review that delivering skills to raise further standards in STEMscience, technology, engineering and mathematicsteaching is important. I am extremely fortunate in having a science learning centre in my constituency, which is doing the most amazing work in adding to teachers' qualifications and skills in science teaching. Obviously I want to make sure that the Government continue to invest in science learning centres.
	We need more knowledge transfer, so I am pleased that the Budget sets out how the higher education innovation fund can be improved, as it must be if we are to have the better application of science research that we need globally and domestically. However, we do not always manage to make the transition to science-based industries as we should, so I am also pleased that the Red Book mentioned supporting entrepreneurship and industrial development and set out how the regions can be more involved in science innovation. That is particularly important for us in the north-east, where we shall need to rely heavily on a knowledge-based economy if our region is to catch up with the rest of the country, which needs to happen.
	Of course we have the Newcastle science city, which is to be applauded. However, Durham university has an excellent science base that is not sufficiently recognised by Newcastle science city, so I hope that the Chancellor and his team will pay some attention to Durham university and its science base, which is important for future economic development because it centres on physics and materials research and has an excellent renewable energy research centre.

Kevan Jones: Does my hon. Friend agree that although we need that expansion in places such as Durham we do not need the artificial boundaries on development that are outlined in the regional spatial strategy?

Roberta Blackman-Woods: I entirely agree, and I shall mention the regional spatial strategy later on.
	I am pleased that the Budget encourages international collaboration in advancing our science base. Durham university does that work excellently and I should like further investment in that field.
	I want to talk next about education and skills. We need to enhance skills if we are to improve social mobility. The Leitch report was extremely important in drawing attention to the need for higher level 2 and 3 skills and, crucially, for employers to contribute more to the training of their staff. We have the measures to improve the new deal and in-work training, and, in particular, to move from the new deal to in-work training to train to gain, and to build on the 14-to-19 curriculum. All that has to happen if we are truly to get the skills base up to the level that we need to compete globally.
	I am pleased that the Budget announces an early CSR settlement for the Department for Education and Skills, which, again, will see education spending rising by 2.5 per cent. in real termsup from 4.7 per cent. of GDP in 1997 to 5.6 per cent. in 2010. That is important because it is against a background of spending on education that has almost doubled in the past 10 years. I should tell the right hon. and learned Member for Rushcliffe (Mr. Clarke) that my experience of education under the ConservativesI was a vice-chair of education in a large unitary authority and a governor at a schoolwas one of decreasing budgets, having to close schools and continually having to make cuts. It is only in the past five or six years as a governor that I have seen real investment in our schools. The Government are continuing to invest at record levels. The figures have increased from 2,500 per pupil in 1997-98 to 6,600 in 2010-11.
	That is not all that the Government are doing. Sometimes Opposition Members ask us to demonstrate what the money has delivered. Well, it has delivered expanding early years provision, impressive and rising results at key stages 3 and 4, an improvement in post-16 staying-on rates, Sure Start centres, personalised learning, and extended hours and extended schools in every community. Schools in my constituency are simply being transformed, not only by additional teachers and classroom assistants, but in respect of the fabric of buildings and the consumables that schools are able to use.
	The next area that I want to mention is regional development and planning. The Budget report mentions city regions. Clearly, cities are important to our future economic development, but I would have liked to hear more about what is going to happen to smaller towns. Page 47 of the Red Book states that
	improving the economic planning and decision-making processes at the regional level
	is important, as is
	enhancing the strategic role of RDAs
	and improving regional accountability. However, it is not clear how any of that is going to happen. We need to hear more about a regional policy that is going to improve areas such as the north-east and truly invest in them so that all the growth does not go to the south-eastnot that I have anything against the south-east, but it does not seem to make sense not to develop massively those areas of the country that are very much in need of improvement.

Kevan Jones: Does my hon. Friend agree that one step forward would be to abolish the unaccountable regional assembly in the north-east, which takes something like 2 million a year, and to redirect that money into actual community development in constituencies such as hers and mine?

Roberta Blackman-Woods: AbsolutelyI agree totally and would very much like to see that on the agenda.
	I understand from the report that a review of regional development agencies is taking place. I would like to hear from the Minister what role Members of Parliament will play in that review. As I have said, in the report there is a lack of strong mechanisms to reduce regional inequalities. The regional spatial strategy in the north-east is a case in point.

James Gray: I welcome the fact that the hon. Lady would like to see the abolition of the regional assemblies, which are worthless organisations, but does she agree that, if the regional development agencies are to fulfil any useful function, it is important to have them only in those areas that need them? Having RDAs covering every inch of the country, including the most prosperous parts, by definition means that RDAs in less prosperous parts of the country will not do so well.

Roberta Blackman-Woods: That is an interesting proposition and I am sure that Ministers will give it consideration, even if they ultimately reject it. Some redistribution might be helpful to areas such as the north-east.
	The regional spatial strategy for the north-east is in danger of emphasising too much growth in the city regions at the expense of areas such as County Durham, the growth potential of which is neglected absolutely in the current strategy. Such areas have seen housing numbers reduced and there has been an impact on significant developments, such as the Tursdale rail freight depot. I hope that the Government will consider the matter again.
	It is welcome that there is a section in the report on investing in housing and planning. However, I hope that the new housing and planning delivery grant will pay attention to the quality of housing delivered as well as the amount. We see too often that poor-quality housing is being put up. If we are to meet the targets on carbon-neutral housing, the standards will have to improve.
	The report explains how there are improved affordability measures, including shared equity. There is a new competition for producing housing for first-time buyers, which is welcome. However, attention must be paid to the way in which the stock of councils that have not transferred their stock will be brought up to a decent standard. That will require us to build on the decent homes standard. How will councils be able to deliver more rented housing when there is a demonstrable need to do so?

Paul Beresford: Does the hon. Lady accept that many local authorities have not transferred their stock because there has been huge support from local tenants for it not to be transferred, given the quality of the stock?

Roberta Blackman-Woods: That is the case. Tenants in my city voted against a transfer some years ago. However, those tenants desperately need money to be invested in their properties. A lot more affordable housing needs to be delivered in Durham city. The absence of such housing is partly due to the fact that the Lib Dem council has built and delivered little in the past few years. Nevertheless, we must consider improved mechanisms to deliver more social rented housing.
	Paragraph 3.130 of the Red Book gives a commitment
	to ensuring that the planning system delivers the housing and economic development the UK needs in a way which is sustainable and consistent with the Government's wider objectives including on climate change.
	That is much to be welcomed, as is the support for the Eddington and Barker reports. We obviously need more transport and investment in buses. In areas such as mine, which is a largely rural community, investment in bus services has reduced. Alternatively, investment increasingly goes towards subsidising services that do not meet the needs of the local population. We also need more investment in trains, especially local trains that can transport people throughout the region more efficiently than those on the main line.
	I want to pay particular attention to Barker. We are told that there will be a White Paper later in the spring on improving responsiveness and efficiency in land use planning. That makes me very nervous. I realise that it is sensible to take a more strategic approach on economic development and the need for planning. Positive planning for economic development needs to happen and an improvement in the processes of economic development is required. However, planning, by its nature, is a very blunt instrument. Different places have different economic development needs. I hope that the White Paper will acknowledge the difference between areas. My constituency is a historic town, and while it needs economic development, it needs a particular sort of such development to protect and enhance its heritage. Having read Barker, I am not convinced that that will happen. Many people in my constituency are fed up with the increasing number of blocks of luxury flats, which do not meet housing need and impact negatively on the heritage of the city. That movement has to be stopped. Planning policy statement 3 is a step forward, but the regional spatial strategy needs to address that issue in the north-east. We need additional housing if there is to be growth in the north-east, but the area needs to be developed sensitively.
	My last point but one is about the planning gain supplement, which is another subject that makes me nervous. I agree that we should have a betterment tax; in fact, I have long argued for one, but I am worried about local authorities being given incentives to approve planning applications. A percentage of the money will come back to them, but that is a dangerous thing to do, because it could allow local authorities to sell every bit of green space and brownfield land that they have for development, as they will get a percentage of the money.
	Of course it is important that money should be spent on infrastructure, but I was concerned about paragraph 3.150 of the Red Book, which says that all local authorities and partners will have to work together locally to improve the infrastructure. That does not happen often at local authority level, particularly where there are different tiers of government. It is bad enough if the tiers of local government are of the same political party, but if they are of different political parties, it is just not likely that they will work together to increase infrastructure. I would appreciate it if the Government took that proposal away and looked again at how money from planning gain can be allocated sensibly throughout the country to support development.
	My last point is about child poverty. I am proud that the Government have set ambitious targets to reduce it; it is better to have very ambitious targets and not meet them than not to have any targets. Ideally, we would like to meet the ambitious targets, but we should recall that under the previous Government, child poverty more than doubled. It will be difficult to reduce child poverty to the level of the Government targets, but I am pleased that that is firmly on the Government's agenda, and that measures in the Budget will improve the incomes of the poorest families by about 425 a year, and of all other households with children by about 250 a year.
	In conclusion, we should applaud the Chancellor for the Budget, which is about investing in education and science and helping us to deliver the skills base that we need for the future if we are to be competitive in a global economy. However, it also looks after the needs of pensioners and the poorest families with children, and we should all welcome that.

Brian Binley: I congratulate the hon. Member for City of Durham (Dr. Blackman-Woods) on her wide-ranging speech. May I say how much I welcomed her remarks on unelected regional assemblies? Her remarks on supplementary planning gain were interesting, and although I, too, have concerns about it, mine differ from hers.
	I will not speak on a wide range of subjects. You may be pleased to know, Mr. Deputy Speaker, that I will limit my remarks to the narrow issue of small business and the way in which it has been treated at the hands of the Chancellor in the Budget. I wish to put the case for small business simply and straightforwardly, in the hope that I can create some understanding of that important issue among Government Front Benchers, because I fear that they do not have a great understanding of that area of economic activity. I wish to articulate the concerns of the many people in my constituency of Northampton, South, who have built up businesses that started off very small, as most of them do. They express great concern about the Budget that the Chancellor delivered.
	Finally, I wish to appeal to the Government. Although I recognise that the chances of changing the Chancellor's mind this year are not very great, I hope that the Government will rethink their attitude to the issue, not least because they burden even further an area of economic activity on which they, their children and their grandchildren will rely in the years to come. In that context, their actions are extremely short-sighted.
	I was about to say that I was a small business man myself, but even with your well-known generosity, Mr. Deputy Speaker, I reckon that you would not have accepted that, so I shall say that I am a business man who founded two small businesses. I shall give a little background about those businesses in order to underline the credibility with which I hope I speak and which I hope those on the Government Front Bench will recognise.
	My wife and I started the first business in 1989, and we used the small amount of equity that we had in our own house to start that business. So we know about risk-taking. We know about the worry that risk-taking creates for people who start small businesses. We know the hard work that those people put into the business, not least because their very livelihood is at stake; the very home they live in is at stake, in many cases. Indeed, we knew that we could have lost everything. I am delighted to say that that business now employs about 140 people. We succeeded, and no doubt the Chancellor is delighted that we succeeded, because we collect for him and we pay to him a considerable amount of tax in very many ways.
	Let me tell the House about the second business, which we founded with a rather crazy South African in 1993. It was a publishing business, another great risk, and again we put on the line all the gains that we had made from the first business. It may seem that we are gluttons for punishment. We worked hard for many long hoursburned the midnight oiland spent sleepless hours worrying about cash flow, which is one of the greatest problems for small business. However, we again succeeded, much against the odds, and that business now employs over 80 people.
	What are the lessons I have learned from those experiences? What can I bring to the House to help the Government create policies that are friendly to small business and that encourage people to create them in their turn? I will tell the House the lessons that I learned so that hon. Members have an understanding of what small business people think about. The lessons might surprise hon. Members. They are different, I fear, from the lessons that they might think I learned.
	I learned that a successful small business is not about chasing volume. Of course one needs to work to earn the money, but volume is not the prime objective. The prime objective for a business man is to look at the bottom line and make sure every month that he is successful with the volume that he creates. The second lesson that I learned is that it is not about sales. Indeed, sales can easily be given away. Unless he is very careful, a business man can easily price his product or service at a level that does not create what he really needs in a small businessa steady, credible, managed cash flow. The third priority that I learned was that running a business is not necessarily about investment in things, such as new equipmentit is about investment in people. Those are the prime concerns when an entrepreneur sets up a small business.
	I see that Government Front Benchers are talking among themselves. I hope that that means they have taken my comments on board and will change their view as delivered in the Budget, although I am doubtful.

Theresa Villiers: Does my hon. Friend agree that the hit on small companies in the form of increased taxes in a more complex system could constitute a real blow to local shops, which are already struggling to be viable in a climate of intense competition from the big retailers?

Brian Binley: I accept that entirely. Indeed, many of our local shopkeepers now come from another culture, and the Government are making it more difficult for them to run their businesses. I believe that that is of great concern, and I think that the Government do as well. Perhaps they had not thought about it before. I hope that we have put another thought into their minds.

Graham Stuart: My hon. Friend has told us the compelling tale of the start of his business. I can boast having started mine a little earlier, when I was a student. Like my hon. Friend, I remember the bank envelopes: just the symbol of the bank was enough to start my hands sweating every time I looked at it. Those early years involved very long hours and very tight margins, and the real difficulty of maintaining a business and investing in people.
	Is my hon. Friend aware that the three-point rise, whatever it means to Ministers who are so distant from the livelihoods of people running small businesses, constitutes a 16 per cent. increase in corporation tax for the smallest and most entrepreneurial businesses in the country?

Brian Binley: I did not know that, but I am delighted to accept it from my hon. Friend, because I know of his concern about these matters and the work that he puts into them.

Rudi Vis: Are you suggesting that successful large companies

Mr. Deputy Speaker: Order. I am not suggesting anything. Perhaps the hon. Gentleman would like to rephrase his question.

Rudi Vis: Do you accept, Mr. Deputy Speaker, that what the Gentleman is saying suggests that he is attacking large and successful companies?

Brian Binley: I am delighted to tell the hon. Gentleman that that is total nonsense. He knows it, I know it and every other Member in the House knows it.
	Not once during the first 10 years of either of my businesses did I come near to investing 50,000 in a given year. As I said, the initial equity from our home financed the start-up, and growth thereafter was financed from retained profit. That is another aspect of the creation of small businesses that should be taken into account. However, even with a deliberate policy of controlled growth, we faced serious problems on many occasions: problems caused by customers going bust, by debtors not paying upnot just not in time, but sometimes not at alland by clients pulling work unexpectedly. Those are all major blows to a new, small, growing, developing business, and they place massive demands on good cash-flow management.
	The fourth priority was to make friends with the bank. Had I not done so, the bank would not have been anywhere near as understanding as it was, and my business could have gone to the wall. However, I fear that today many banks are less compassionate. I know people who have tried to start small businesses and have found that aspect much more difficult. I was lucky: I made friends with my bank, which sustained us through some very difficult times. That is the reality of growing a small business. We faced risk, we faced hardship, we faced long hours, we faced sleepless nightsbut we grew to a point at which we employed more than 220 people collectively. The Chancellor should be delighted with the work that we have done to service his income. We should be given a medal, but what do we get from him? Tragically, he kicks us where it hurts most, and where it hurts most small businessesin our ability to manage good cash flow.
	What should the Chancellor have taken into account when he made his decisions on this Budget? He should have recognised that small businesses employ more than 12 million peoplethat is 58 per cent. of the private sector employment figure. He should have recognised that adding that figure to the UK's medium-sized businesses shows that together they will create more than 2 million jobs in a 10-year cycle. When he looks at UK plc, he will recognise that they will, conversely, shed 1.5 million jobs in the same period. One might have thought that he would see small business creators as his heroesthe people whom he needs to nurture, reward and supportyet he adds to our problems.
	Why is that? I think that it is because he does not understand the small business sector, which creates jobs at a fraction of the cost wasted by the Government in their failed attempts to help it to do so. Listen to what my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) says about how small business views small business services run by the Department of Trade and Industry. Look at the cost of business support, in which small business plays a parta staggering 12 billion per year according to the Richard review of small business and Government. Look at the National Audit Office report of 2006, which was scathing about Government support services, comprising 3,000 schemes that the Government now say that they are going to cut down to 100. I could go on to talk about the lack of skills and poor educational training as regards supporting the workplace.
	The truth of the matter is that the Government have not been an outstanding success when it comes to small business, and small business is aware of that fact. Is it any wonder that they are not a greater success, given that I go to the Library and find that so few Labour Members have had business experience? Is it any wonder that they do not understand business generally and small business in particular?

David Taylor: I declare an interest as an accountant to small business in a long period leading up to 1997. What the hon. Gentleman has said is a masterclass in how to take the seed of an idea from a micro-business through to a small and then a medium-sized enterprise. Does he accept, however, that a basic element missing from his remarks is that organisations should not choose a business format for fiscal reasons? Is it not the case that artificial incorporation of small businesses has been a costly mistake, and that it was right for the Chancellor to tackle that abuse?

Brian Binley: I am delighted to take an intervention from one of those Labour Members who has had business experience, which gives it greater credibility. Nevertheless, he will know that the Chancellor created the situation in the first place. The problem is not that people were taking advantage of a tax loopholewhich I do not support, by the waybut that things could have been handled differently, thereby not harming small business in the process.
	What has the Chancellor done in the Budget? We all knowhe increased the rate of corporation tax for small business from 19 per cent. to 22 per cent. by 2009. He added an extra 820 million to the tax burden that small businesses bear. He claimed that small business would claw that money back by claiming an annual investment allowance of 50,000 and benefiting from an increase in research and development allowances.
	 It being Ten o'clock, the debate stood adjourned.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),
	That, at this day's sitting, the Business of the House: Northern Ireland (St. Andrews Agreement) (No. 2) Bill Motion made be proceeded with, though opposed, until any hour; and proceedings on the Motion in the name of Mr. Chancellor of the Exchequer relating to Ways and Means Amendment of the Law may continue until midnight. [Mr. Cawsey.]
	 Question agreed to.
	 Question again proposed.

Brian Binley: I was grateful for the chance to get my breath back.
	I want to deal with giving with one hand and taking away with the other. I do not believe that the Chancellor took with one hand and gave with the other. Small business simply does not invest the sort of money that allows it to claim back its costs in extra corporation tax every year. The additional taxation that small business pays will not be offset. The Chancellor simply does not understand small business.

Andrew Love: Will the hon. Gentleman give way?

Brian Binley: How can I refuse the hon. Gentleman who accompanied me to Sri Lanka?

Andrew Love: How do I answer that?
	Does the hon. Gentleman agree that all the surveys of small businesses show that the most important factor for them is a stable and growing economy? Has not the Chancellor delivered that? Should not the hon. Gentleman therefore say what a good job the Government have done in creating the conditions for small businesses to grow?

Brian Binley: Of course we all need a stable economyevery business and every family in the land needs that. However, I equally recognise that the first five years of the long period of stable economy were created by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), who has now left his seat. We need to pay tribute to him, too.
	I have said that the Chancellor does not understand small business. However, he fails to understand an even more important factor: small businesses mainly sustain growth from retained profit. It is as simple as that, and I am glad to see Labour Members nodding. Do not they realise that, by increasing the burden of taxation, they limit sustained growth because they limit the amount of retained profit? It is not difficult. Many hon. Members tell me that the Chancellor is the cleverest man to have held the office, so I would have thought that he understood the point that I have just madebut he does not. In failing to do that, he has harmed many small businesses in this country.
	The Government have tried to spin their actions as help for small businesses and the wealth-producing sector. Let us consider the genuine reason for the Chancellor's decision to increase corporation tax for smaller businesses. The Secretary of State for Trade and Industry let the cat out of the bag last Thursday, when he was questioned on the matter. Do you know what he said? He said that a
	number of people were incorporating and becoming small companies to avoid paying tax and national insurance.[ Official Report, 22 March 2007; Vol. 458, c. 933.]
	There we have it. It is not about growing small businesses; they have to suffer because one-man operations are using incorporation, as you rightly say, as a loophole.

Mr. Deputy Speaker: Order. The hon. Gentleman must be careful about his phrasing, especially his use of the word you.

Brian Binley: I accept that and thank you for your guidance, Mr. Deputy Speaker.
	There we have it. As I said, it is not about growing business, but closing a loophole. Surely it is not beyond the wit of the very cleverest Chancellor of the Exchequer that the Labour party says it has ever had to create a system that solves that problem without harming small business. The truth is that this very clever man did not think about it; he did not think that it was worth his attention. I find that really rather ironic when this is the same Government who use those incorporations to boast about the growth of entrepreneurial activity. He wants it both ways as well, which is not the hallmark of a very clever Chancellor.
	When I heard the Budget speech, I was a bit concerned that I might be over party political. I know that that might be difficult to understand, but I was concerned, so I wanted to check out what other people in business might have said about this Budget. I noticed that the hon. Member for Blaydon (Mr. Anderson) said that most business commentators supported the Budget. Well, let us test that theory.
	Nick Golding, chief executive officer of the Forum of Private Business said:
	The Chancellor has used smoke and mirrors to disguise the fact that there is nothing in this budget to support small business.
	The Federation of Master Builders said:
	SMEs have enough to worry about with seemingly endless red tape and its disproportionate effect on small firms without having to stump up extra cash to subsidise a tax cut for the big boys.
	The Federation of Small Businesses said:
	After some welcome initiatives for our members he throws it all away with a tax hike aimed at small businesses.
	The British Chambers of Commerce said:
	He has also increased the amount of tax that those covered by the Small Companies Rate will have to pay by over 800 million. This is a substantial rise and will hit those looking to grow their businesses... many of our members will feel let down by today's budget.
	The best quote of all comes from a gentleman I happen to see in my local public house most Friday eveningsa guy who has run a business for 30 years. What he said to meI hope that this is parliamentary language, Mr. Deputy Speaker, but I am simply repeating what he saidis: He's a snake oil salesman who makes out he's doing you a favour when all the time he is covering up his own mistakes. Should I withdraw that, Mr. Deputy Speaker, or is it acceptable?
	What could the Chancellor have done to help small business?

Andrew Love: The hon. Gentleman did not mention the Institute of Directors or its director, Miles Templeman. Can he tell us about his comments on the Budget?

Brian Binley: The truth is that I did not read the bit to which the hon. Gentleman refers, but after this debate, I will go and look at it. What I do know is that the Institute of Directors complained about the impact of the increase in corporation tax on small businesses.
	How could the Chancellor have helped? It is a missed opportunity for a sector that needed his help and understanding, but did not get it. The Chancellor could have reintroduced a new starting band for corporation tax for the first 10,000 of profit, but he did not. He could have introduced a more efficient VAT registration process, but he did not. He could have integrated national insurance with income tax for schedule E taxpayers, but he did not. He could have linked the national minimum wage to the retail prices index, but he did not. He could have given businesses more influence with skills initiatives for small business, but he did not. He could have set aside a percentage of public procurement contracts for small business, but he did not. He simply placed a further 1 billion of extra tax on to businesses next year and more thereafter. Thank you, Mr. Chancellor, from the business community. You have shown yet again that you simply do not understand the small business sector and, worse still, you have shown that you do not really care about it either.
	Small business feels let down. It is the dynamo of the economy, and it will provide jobs and innovation in the future. What a tragedy that this Chancellor does not understand.

Graham Stuart: It is a great privilege to follow my hon. Friend the Member for Northampton, South (Mr. Binley), who has given a tour de force on behalf of small businesses that this House needed to hear, because of the impact on small business of this Budget. Too few Labour Members have ever worked in small business or understand small business. They cheered the Budget, which will harm small businesses such as corner shops. My hon. Friend could have mentioned that many post offices around the country will be hit by the increase in tax.
	Like my hon. Friend, I plan to be relatively narrow in my focus tonight. I shall focus on the environment, the environmental impact of the Budget and the environmental record of this Chancellor of the Exchequer. I will then go on to discuss some of the local issues in the East Riding of Yorkshire, many of which affect other constituencies.
	In 1997, the current Chancellor made his first pre-Budget report, in which he stated that
	nothing is more important than our approach to the environment.[ Official Report, 25 November 1997; Vol. 301, c. 779.]
	This is the last of the Chancellor's Budgets, so it is a suitable time to examine his record on the environment. I hope that I will not bore the House too much, but I shall leave hon. Members to judge that.
	I am currently a member of the Environmental Audit Committee, which is a cross-party Committee dominated by Labour Members and which examines this Government's environmental record. The Committee's report on the pre-Budget report 2000 stated:
	The Committee has found no evidence that the Government has carried out a comprehensive environmental appraisal of its Pre-Budget measures which would even satisfy its own guidance in this area...The Government's response to us on VAT and energy efficiency is not persuasive nor even credible.
	The Government's failure on energy efficiency is sad. Those of us who want to see the carbon footprint of this country reduced know that the cheapest, most effective and quickest route to reducing emissions from this country is through energy efficiency.
	What is the Chancellor's record? The next report by the Environmental Audit Committee appeared in 2001. The Committee included many Labour Members, such as the right hon. Member for Oldham, West and Royton (Mr. Meacher), the former Members for Cardiff, Central and for Aberdeen, North, and the hon. Members for Wrexham (Ian Lucas), for Stoke-on-Trent, North (Joan Walley) and for Telford (David Wright). The report stated:
	We regret the fact that the Treasury has retreated from a strategic commitment to environmental tax reform...The Treasury is failing to provide adequate leadership and co-ordination across central Government...We strongly regret the refusal of the Treasury
	this will be familiar to Select Committee members across Government
	to provide us with the Spending Review main guidance. This...vividly demonstrates that the Treasury will only share what it does not value or consider important.
	That report came from a Labour-dominated Committee.
	Were things improving in 2002? The 2002 Environmental Audit Committee report stated:
	The Government's Climate Change strategy for reducing greenhouse gases is seriously off-course, and current progress and future projections must be reviewed as a matter of urgency.
	The Committee picked up on the Government's failure to transfer tax from goods and employment on to bads for the environment, which they had originally promised to do:
	The Treasury's strategic objective of shifting the burden of taxation from 'goods' to 'bads' is in danger of stalling. Indeed, we see little evidence of an environmental tax strategy as such.
	The pattern is becoming set, and we look each year for some hope and some chance of change.
	As for the 2003 pre-Budget report, the EACstill dominated by Labour Membersfound that the Chancellor, though definitely Brown, was far from green. Many articles have been written in newspapersfor instance, by Stephen Tindale of Greenpeaceon the question, Is the Chancellor green? The truth is that Brown may be the new BlackConradbut definitely not the new green. The EAC stated that
	the Climate Change Strategy is seriously off course. The policy instruments the Government has put in place have yet to make a significant impact on the UK carbon emissions trajectory.
	On the 2004 pre-Budget report, it stated:
	It is disappointing that the Treasury, after consulting in both 2002 and 2003 on fiscal measures for domestic energy efficiency, was unable to include in Budget 2004 a more significant package of measures.
	In 2005, the EAC came out again to say [Interruption.] It is worth putting on record the reports of a Committee dominated by Labour Members, because they paint a picture of the Chancellor's total failure to deliver on the environment. I understand why those on the Government Front Bench do not want to hear it. It said:
	PBR 2005 signifies a continued slowing down of the Treasury's momentum in turning its rhetoric on the environment into action.

Charles Walker: Surely there must be some good news somewhere. It cannot really be this grim, can it?

Graham Stuart: I recognise that my speech is dirge-like in flavour.
	In 2006, the EAC again stated:
	We are very disappointed by this Pre-Budget Report.
	I would love to say that the Labour Members on the Committee had some positive news, but I am afraid that they did not. They said:
	The picture is of an ongoing retreat from the Treasury's announcement in 1997 of a policy to shift the burden.
	According to the Labour-dominated EAC, the Chancellor's history on the environment is one of failure after failure. He has not delivered as he originally promised when he said that it would be the most important measure for the Government.

Stewart Jackson: I agree with my hon. Friend that the Chancellor only goes green when he sees his poll ratings. Does he agree, however, that our right hon. Friend the Member for Witney (Mr. Cameron) has set the agenda on the environment, and that the Chancellor failed to make a single substantive speech on the environment in the 10 years prior to the end of last year?

Graham Stuart: I am grateful to my hon. Friend for mentioning that. There have never been more than two references to climate in pre-Budget reports and Budgets in the past 10 years. In 1997, there was none, and there were only one or two every year until the appointment of my right hon. Friend the Member for Witney (Mr. Cameron) as Leader of the Opposition. Suddenly, in 2006, the Chancellor's two major speeches had 16 mentions of climate between them. Suffice it to say that last week's Budget speech alone contained 14 references to climate.

Julia Goldsworthy: Does the hon. Gentleman admit that the Conservatives are Johnny-come-latelies to the argument for the need for environmental action? Will he comment on whether the proposals that we have heard floated are policy commitments or beliefs? What impact does he think that those measures, if they are adopted as Conservative policies, will have on climate change?

Graham Stuart: As the hon. Lady well knows, the Conservative Government signed Kyoto [Interruption.] The noble Baroness Thatcher made the original commitment before it was later signed. She was the first of this country's major leaders to put the focus on climate change. As we can see from the figures revealing the attention that the Chancellor has paid to the issue over many years, the Conservative leadership, particularly that of my right hon. Friend the Member for Witney, has changed the Government's approach and attitude, after the Chancellor's long tale of failure. Does my hon. Friend the Member for Broxbourne (Mr. Walker) wish to make a contribution? I was looking forward to another helpful intervention.
	Why has the Chancellor suddenly undergone this Damascene conversion to the environmental cause? It has happened because of the arrival of my right hon. Friend the Member for Witney as the new Leader of the Opposition. Last week's Budget was designed not only to give a false impression of tax cuts, which has been demonstrably torn apart by Conservative Members, but to give the impression that the Chancellor will simplify the tax systemthat he is a straightforward Chancellor who can be trusted, and who can tackle the allegations made against him. As we know from a leaked Treasury staffing report, staff who work for the Chancellor recognise his character as being anything but that. More than half of those who left the Treasury cited dissatisfaction with the job as the reason for doing so and almost a third mentioned low morale or cited boredom. The truth is that the Chancellor's character is one of the central issues of the political debate as we move towards having a new leader of the Labour party. Even more than the details of the Budget, it is the Chancellor's character that has been brought into the greatest relief since the announcement of the Budget last week.
	In terms of the environment, we need only turn to what has been said by Labour party sympathisers and ex-activists, such as Stephen Tindale of Greenpeace, who used to work for the Labour party. He said that in 2000:
	The environmental movement was blamed inside government, and by Brown in particular, for failing to speak out loudly enough in support of government.
	What does this Chancellor do when someone does not speak out loudly enough in support of him or the Government? Stephen Tindale tells us. He said:
	From 2000 until the middle of last year Brown lost interest in environmental issues, and the doors of the Treasury were closed to us.
	That shows the character of the Chancellor: as a Chancellor, he has failed to deliver for the environment on every occasion.
	Let us go through some of the details of the Budget. Road fuel duty has been increased by 2p per litre. It was said in the pre-Budget report of 1999 that
	the Chancellor has decided that revenues from any real terms increases in fuel duties will, in future, go straight in to a ring-fenced fund for improving public transport and modernising the road network.
	Does that promise still hold? Will the money raised from the fuel duty rise go towards improving the transport network? I should like the answer to that when the Chief Secretary winds up the debate.
	We know that the increase in vehicle excise duty on so-called Chelsea tractors will impact on people in rural areas, such as those who need such vehicles for farming. There was an opportunity to introduce a new tax category for people who have to use those vehicles for work, which would have made a tremendous difference to those in rural areas who are currently struggling to survive economically, but it was not taken. There was also an opportunity to increase VED to an extent that would lead to a genuine transfer from more gas-guzzling cars to more efficient ones.

Julia Goldsworthy: May I draw the hon. Gentleman's attention to last year's Finance Bill and point out that the Liberal Democrats tabled amendments to address rural-proofing the VED increases, and that we also tabled amendments to try to introduce VED at such a level that it would have an impact on behaviour?

Graham Stuart: Yes, and we all look forward to having a Liberal Government that will actually introduce those changes, of course.
	There has been no real movement on VED, but there has been movement in the Budget on waste. The landfill tax escalator has been increased from 3 to 8 a year from April 2008, but why is there not a lower rate of landfill tax for waste that has been biologically treated before landfill? Some waste cannot be dealt with otherwise, and it should attract a lower level of landfill tax. There was also an opportunity to deal with incinerators, which are springing up all over the countrythat development is driven by the Government. There should be an incineration tax to maximise the use of greener ways of dealing with waste. Also, what do we find in the Budget on energy efficiency, which is the most critical, and the easiest, means through which to make genuine improvement and change? Absolutely nothing.
	The Budget mentions zero stamp duty for new homes that meet the zero carbon standard, which appears to send a signal to the building industry to invest in zero-carbon homes for the future, but no. The Chancellor has put a five-year limit on that zero duty. It will end in 2012, so the likelihood of builders changing the way that they build homes is small to non-existent.  [ Interruption. ] Indeed; it is truly a zero-rated Budget. The Government's record in this Budget and the previous 10 is one of failure to put the environment at the heart of their policy, and it is in direct contradiction of the promises made when they came to power.
	I turn from the environment to the other issues that most concern my constituents. The last Labour party manifesto promised that the share of national wealth spent on education would increase by the end of this Parliament. I should be interested to hear the Minister confirm or deny that. The truth is that, at 2.5 per cent., it is growing at less than the predicted rate of growth of the economy.  [Interruption.] Does the Economic Secretary want to intervene?

Edward Balls: I can confirm that, entirely consistent with our manifesto commitment, the share of education spending as a percentage of gross domestic product will rise over the course of this Parliament.

Graham Stuart: I am happy to agree that if the hon. Gentleman and the Government can deliver that, they will have met their manifesto commitment. Of course, all this depends on the rate of growth of the economy. Bearing in mind the powerful speech of my hon. Friend the Member for Northampton, South on the impact on small businesses, the likelihood of the Government's increasing the share of education spending as a percentage of GDP is probably greater, given that they will reduce the rate of economic growth through the measures that they introduced in the Budget.

Edward Balls: It is still going up.

Graham Stuart: That very much depends on the size of the economy at the end of the Parliament, but it would appear that over the next few years, the plan will produce a lower increase in education spending than the rate of growth of the economy overall.

David Taylor: The hon. Gentleman was in the Chamber, as I was, when we first heard the Chairman of the Public Accounts Committee articulate what will in future years be known as the Gainsborough doctrine. That doctrine moves on from sharing the proceeds of growth to confiscating or hypothecating them: to transferring all those proceeds into tax cuts, thereby denuding public services. Was the hon. Gentleman attracted by that innovation?

Graham Stuart: I am grateful for that intervention. The vision of removing all those on low payI think that my hon. Friend the Member for Gainsborough (Mr. Leigh) suggested the figure of 15,000from the labyrinthine attentions of the tax credit system, in which half the payments made are wrong and are dragged back from those who have least, is an attractive one. I doubt whether the time frame of five years or one Parliament that my hon. Friend suggested can be met, but I agree with him that when the Conservatives return to power in 2009 or 2010, over the following 15 or 20 years we will see those on low pay removed from that system, a transformation of people's economic activity and, therefore, an eventual increase in the tax take. We could fulfil the vision, which my hon. Friend did not entirely detail, of more investment in public services, while lifting the low-paid out of paying tax.  [Interruption.] The hon. Member for City of Durham (Dr. Blackman-Woods) is bouncing up and down; does she want to intervene?

Roberta Blackman-Woods: I am grateful to the hon. Gentleman for giving way. Does he accept that the table on page 158 of the Red Book not only outlines total projected spending on education until 2010-11 but the proportion of GDP, demonstrating that it will grow until 2010-11?

Graham Stuart: I think that the Economic Secretary has already dealt with that issue . The Budget did not touch on the NHS, which is the predominant issue in the minds of my constituents, as the local primary care trust, appointed by the Government, is setting about closing every NHS bed in my constituency. My constituents are also concerned about social care, about which we heard nothing in the Budget. Social care is a mushrooming problem, as recognised across the House, and it is a pity that the Budget did not take up that issue.
	We need a change in the comprehensive spending review and more investment in transport, to provide a fairer allocation of transport investment across the country. It is not fairly allocated to Yorkshire and that has an impact on issues such as the Humber bridge tolls, which remain in place and inhibit economic growth, the improvements to the A1079 in my constituency, and the possibility of the return of a rail link between Beverley and York.

Philip Dunne: I remind the House of my entry in the register of Member's interests.
	It is, as always, a great pleasure to follow my hon. Friend the Member for Beverley and Holderness (Mr. Stuart), who spoke with his customary passion, especially about the lack of detail in the Chancellor's statement about the NHS. Indeed, he hardly mentioned it.
	I intend to talk mostly about small business and to echo some of the comments made by my hon. Friend the Member for Northampton, South (Mr. Binley), and I shall finish on the environment. However, I wish to introduce my remarks by commenting on the tone of the Chancellor's speech. It was an undeniably political speech, which is no surprise to anyone on this side of the House and probably not to anyone on his own side, given his ambitions, which he obviously hopes will be realised sooner rather than later.
	The initial reaction from Labour Back Benchers was positive and the Budget was well received in the Chamber. However, as hon. Members have had more time to reflect on what was saidand, perhaps more importantly, what was not said, but appeared in the detail of the Red Book and the supporting documentsthe reaction has been markedly less positive. Indeed, the glee of many Labour Members has started to dissipate.
	It was the right hon. Member for Birkenhead (Mr. Field) who pointed out the logical difficulty for the Chancellor in criticising, in future, the policy of my right hon. Friend the Member for Witney (Mr. Cameron) and the shadow Chancellor in relation to sharing the proceeds of growtha point to which I shall return. This evening, we heard from the Chancellor's great friend and former Paymaster General, the hon. Member for Coventry, North-West (Mr. Robinson), in a devastating speech that damned the Chancellor with faint praise. The hon. Gentleman called the Chancellor fundamentally saneas opposed to completely sanewhich suggests that a large part of him may not be sane. The hon. Gentleman went on to criticise two flagship policies. He criticised the scrapping of the 10p starting rate of income taxI suspect that he introduced that himself, although I am not familiar with the history of his involvement with the Governmentas an inappropriate move for a Labour Chancellor. He also highlighted the problems that will be caused for small businesses by the increase in the rates of corporation tax. It was not exactly a ringing endorsement from one of the Chancellor's closest political friends.
	I would characterise the Chancellor's speech as one in which he blew smoke in order to hideor to use the colloquial term, to burybad news. He put up a mirror in an attempt to reflect the policies of my right hon. Friend the Member for Witney and steal his clothes.

Bob Spink: My hon. Friend talks about smoke, and he said that the Chancellor was scrapping the 10p rate of income tax. In fact, he is doing no such thing: instead, he is doubling the 10p rate to 20p.

Philip Dunne: I am grateful to my hon. Friend for pointing out the reality of what the Chancellor has done. The Budget was camouflaged as one that would cut taxes for all levels of income, but we understand now that that is not so.
	The income tax cut so dramatically flourished at the end of the Chancellor's remarks hid the impact of increasing the starting rate for the poorest members of society, especially those who do not have children. That is an astonishing redistribution from the poor to middle Britain, given that it comes from a Labour Chancellor who has sought to do the reverse during his tenure in office.
	I come now to the Chancellor's track record with the public finances over the past 10 years. The chief executive of the Forum of Private Business has talked about smoke and mirrors in respect of the Budget, and that metaphor is appropriate. We have heard this evening about the public debt and the Chancellor's stewardship of public borrowing. My right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) eloquently highlighted the problem with the Chancellor's forecasting skills. This is the seventh year in a row that the Budget forecasts for public sector borrowing have had to be increased. In fact, the Chancellor managed to get those numbers right only when they had been set by my right hon. and learned Friendthat is, when the right hon. Gentleman was following the spending plans of the previous Chancellorand we heard last week that there would be a further 8 billion increase in public borrowing over the next few years.
	Tucked away in about four words in the Chancellor's statement was an announcement that although future spending increases had been set out for almost every Department of statebut not for the NHS, as that is still to comethe right hon. Gentleman had decided to delay publication of the comprehensive spending review until October. Why? The political tone of the Chancellor's endeavours suggests to me that he wants to make sure that it will be his hand on the tiller, and not the current Prime Minister's, when the CSR is eventually published. That means that he will be seeking to tie the hands of the Chancellor who succeeds him.
	The Budget speech contained a great deal about tax cuts, but a detailed reading of the Red Book makes it clear that the tax burden is rising significantly. Last year it was 39.2 per cent. of GDP, but in 2008-09 it will be 40.4 per cent., an increase of 17 billion. The total of tax and national insurance as a percentage of GDP is now the highest since 1997, and will increase over the next five years. I accept that the Red Book uses the OECD definition of these matters, but it does not include tax creditsanother of the Chancellor's smoke-infested attempts to hide the amount of spending undertaken on his watch.
	The Chancellor made some big-picture announcements. He said, with a great fanfare that was well received by Labour Back Benchers, that he would be responding to the parliamentary ombudsman's criticism of the Government's pensions mis-selling allegations by increasing the amount available to the financial assistance scheme to 8 billion. A huge cheer went up, and people might be forgiven for thinking that the entire amount would be put to use. However, on making a closer inspectionand as the Secretary of State for Work and Pensions clarified for members of the parliamentary Labour partywe see that the money is to be spread over 60 years. If we apply conventional net present value calculations to 8 billion over 60 years, the total is reduced to 1.9 billionnot quite such an attractive figure to announce. That is another example of smoke and mirrors. The financial assistance scheme has cost almost 9 million to administer, and as of the last month it had paid out the princely sum of 3.2 million to a mere 1,000 of the 125,000 pensioners who have lost their pensions and for whom it was designed in the first place.
	May I move on to comment on what the Budget has done for business? Another flourish from the Chancellor was the cut in corporation tax to 28 per cent. That is welcome news, and it almost went as far as my hon. Friend the shadow Chancellor proposed a few days earlier. However, it is still higher than the average for the 25 members of the European Union, which is under 26 per cent. Financial services companies will benefit the most, but capital-intensive non-financial businesses will not achieve the benefits that the Chancellor seeks to introduce. That is curious. Manufacturing industry is under intense pressure as a result of threats from low-cost countries to which manufacturing has migrated in recent years, and profitability in manufacturing is at its lowest level since 1992. The Bank of England recently produced research that described the loss of industrial capacity in this country as the most dramatic of any G7 country. Indeed, the share of the economy taken up by manufacturing has fallen from 20 to 15 per cent. in recent years.

Nicholas Winterton: In all the 35-plus years in which I have served in the House, manufacturing industry has been my priority. Will my hon. Friend, who has considerable business experience, describe his concern about the dramatic loss of jobs in the manufacturing sector, bearing in mind the fact that manufacturing is the sole way in which the country can achieve sustainable non-inflationary economic growth?

Philip Dunne: I am grateful to my hon. Friend, who is a tremendous champion of manufacturing, particularly in his constituency, where he regularly raises those issues. Undoubtedly, manufacturing jobs are something that we should encourage. By penalising investment in capital-intensive goods we will make manufacturers less able to continue to invest and to take on the challenge of the low-wage economies with which they are constantly, and increasingly, competing. The measure is therefore of little help to them. The other losers in the so-called Budget for business are small businesses, which must pay an increased corporation tax rate as a result of the Chancellor's sleight of hand. That tax rate, hon. Members will know, will go up by 3 per cent. over the next three years.

Adam Afriyie: It will go up by 16 per cent. overall.

Philip Dunne: I am grateful for that reminder.
	That is damaging, because small businesses are the source of much innovation, employment and growth in the economy. There are 4.3 million small businesses in the UK, and 97 per cent. of firms employ fewer than 20 people. More than half a million people start up a new business every year, and 12 million people work in small firms. One of my hon. Friends mentioned that the number of people who voted for the Labour party in the last two elections is similar to the number of people employed by small firms. Despite what the Chancellor said in the Budget, and despite the attitude of the Treasury and the Revenue, in many respects the Budget undermines some of the most creative and entrepreneurial sectors of the economy. I shall give a couple of examples to show what was happening in the weeks before the Budget.
	The Budget included specific measures on venture capital trusts, which are a form of tax-efficient investing that have been successful in raising equity and closing the equity gap for emerging businesses when it is difficult for them to secure capital from other investors, or purely from bank debt. Last year, 750 million was raised for VCTs and more than 500 million was raised in 2004-05. Each year, the Government have tinkered with the VCT regime and I welcome some of the minor measures introduced this yearsome in response to points raised by me and by other Conservative Members in the Finance Bill Committee, but rejected by the Government. However, they have now recognised that we were talking sense and introduced some of those proposals. I congratulate the Government on listening to the industryas will the industry.
	Those provisions were completely overwhelmed, however, by the astonishing inclusion of two measures that limit investment in individual companies by VCTs to a mere 2 million, which will create a substantial equity gap between 2 million and 5 million to 10 million, at which level there are more sources available through the City. Even more damaging has been the limit on the number of employees in companies in which VCTs can invest: a mere 50 employees. I believe that is also the case for enterprise investment schemes.
	The Government's excuse for that astonishing restriction on the flexibility of those investment vehicles is that it is all down to our friends in Brussels. The European Union, my hon. Friends may not be surprised to hear, has reinterpreted the rules for state aid and decided that any funds raised with the benefit of tax incentives now qualify as state aid, so European definitions of small and medium-sized enterprises need to apply. That move needs to be vigorously resisted by the Government, yet in the Budget they seem to have rolled over with no serious attempt to fight it off. I look forward to hearing their viewsperhaps in the wind-upsof how the position can be restored.
	One impact of the clampdown on VCT flexibility has been significant in an industry close to the Chancellor's heartthe film industry. The head of Ealing Studios, Mr. Barnaby Thompson, who was, as it happens, at university with me, said:
	It's a massive kick in the nuts.
	I think that must be a film expression. A St. Trinian's remake, starring leading British actors, is in production at Ealing Studios, and after the Budget announcements, two weeks before filming was due to begin, the producer lost 2 million of pledged funding through the VCT route, which amounted to 30 per cent. of his budget. That is an example of the practical impact of the measures.
	Two days after the Budget, I received a letter from one of the leading commentators on VCT funding, Mr. Peter Hargreaves of Hargreaves Landsdown, who said:
	In our opinion this means that after 6 April it will be much harder for VCT managers to find companies worth investing in, and in all probability this will radically reduce the VCT capacity for investors.
	His colleague, Mr. Ben Yearsley, was rather more direct. He said that the Chancellor
	has effectively killed off the sector in two years. In 2006, he wounded them
	the VCT industry
	with the gross asset legislation, before going for the kill this year.
	That is what the industry believes will happen as a result of the measures that the Chancellor has introduced in what was supposed to be an innovative Budget for entrepreneurial small businesses.
	The second specific issue arose shortly before the Budget. I have been trying to work out why, on 2 March, Her Majesty's Revenue and Customs chose to publish some detailed notes under the guise of reducing abusive avoidance schemes. The notice has effectively brought to a halt the ability of investors to deduct losses generated through a partnership in one activity against their other income; it is known as sideways loss relief. My understanding is that the Revenue had identified various categories of activity where there may have been some genuine abuse. I am not seeking to criticise attempts to clamp down on genuine abuse or tax avoidance. Such attempts are appropriate. However, this announcement was slipped out on a Friday evening with no prior warning. Having scoured the Red Book, I now think that I understand why.
	The measure is estimated to raise 400 million for the Treasury, and 400 million is close to the amount of money that the Chancellor claims that the Budget will produce in the first year by way of a tax cut. If he had not already announced the measure, he would not have been able to say that this was a tax-cutting Budget. He introduced a tax-raising measure three weeks before. Is that smoke or a mirror? I think that it is smoke. A large cloud of smoke has been blown all over the Budget by that measure.
	What does this mean? It means that the Chancellor has introduced a measure that will stifle innovation and lead to a significant reduction in investment across a whole range of industries. The original intention, I believe, was to address abuses in the forestry and shipping sectors and latterly possibly also the property sector. Where it is actually going to bite is in the creative industriesthe sectors so close to the Chancellor's heart. Film, theatre, electronic games publishing and biotech investmentshigh-risk genuine venture investmentswill find it difficult. The combination of the VCT and enterprise investment scheme rules that I have just referred to and the elimination of sideways loss relief means that investors who have other activities and are prepared to invest, typically in limited liability partnerships, in order to fund those high-risk ventures will no longer be able to relieve the loss.
	The Chancellor might say that we have a generous regime for film finance in this country as a result of the measures in the last Budget. I do not deny that the 20 per cent. production credit available to film producers is a useful assistance. However, if the other 80 per cent. is no longer going to be offsetable against other income, that is not going to amount to a row of beans, because there will be no funding available for ventures such as film productions if investors are no longer going to be able to offset losses incurred from those very high-risk, typically binary, investments. Those investments either work or they fail, and if they fail one loses all one's money. If people cannot offset that loss against their other income, in effect productions will not get the 80 per cent. funding to which the 20 per cent. credit would apply.
	The instrument needs to be carefully considered by Ministers and their advisers in the Treasury. I hope that when the Finance Bill is working its way through the Committee stage, Ministers will pay more attention to the matter than they are at the moment. [Hon. Members: Hear, hear.] I am grateful to my hon. Friends for drawing attention to the fact that I am still speaking. It woke up the Members on the Labour Benches.
	I want to conclude with a few remarks about the Chancellor's environmental measures. In 1997, the Treasury issued a Statement of Intent on Environmental Taxation setting out the Government's aim:
	to reform the tax system to increase incentives to reduce environmental damage
	very noble. They said that they intended to
	shift the burden of tax from goods to bads
	I think that we have heard that elsewhere recently. They wanted to
	encourage innovation in meeting higher environmental standards; and deliver a more dynamic economy and a cleaner environment, to the benefit of everyone.
	For 10 years, the Chancellor failed to provide a green Budget. In the eight years before Labour came to power, green taxes rose as a percentage of overall taxes from 7.8 per cent. to 9.4 per cent. However, by 2005, which is the latest year for which information is available, the Chancellor had allowed that percentage to fall to 7.7 per cent., which was its lowest level since 1987, when the information was first recorded. The Government took just under 2.9 per cent. out of the economy, which was another 18-year low. Mr. Ed Matthews of Friends of the Earth said that he would give the Chancellor
	probably one out of ten. He's got a terrible record.
	I agree with him.
	I will cite two specific measures in the Budget that were an attempt to demonstrate the Chancellor's green credentials. Under the changes to the rates of vehicle excise duty, the most polluting car will pay 400. The hon. Member for Falmouth and Camborne (Julia Goldsworthy) referred to a measure that she and her party tried to introduce during consideration of last year's Finance Bill, which would have made VED increases appropriate for various parts of the country. I represent a rural constituency, and I am chairman of the all-party group on rural services, of which many hon. Members in the Chamber are members. We are extremely concerned that imposing a blanket tax as the Government are doing completely and utterly ignores the needs of rural communities and, especially, people in employment who also happen to be motorists. For example, many farmers drive a 4x4 so that they can do their job.
	If you will allow me, Mr. Deputy Speaker, I will give a couple of specific examples. One of my constituents, Mr. Tony Machin, sent me an e-mail in which he wrote that he owned a 4x4 that was a 15-year-old, 3.2-litre, V6 petrol engine vehicle. He said that he realised that it was not the most economical mode of transport, so 18 months ago he converted it to run on liquefied petroleum gas at a cost of 1,900. The emissions of the vehicle are such that it is cleaner to drive than a small car, but it has not been re-rated and consequently it will attract the new higher rate of VED. Is that the intention behind the Government's measures? If not, why did they not recognise that the instrument that they have introduced is blunt and try to think more carefully about it?
	Another of my constituents, Richard Hill of Intelligent Energy Systems, has asked whether we could
	have some common sense and increase the fee for 'unnecessary' 4x4s.
	He has a 4x4, and I am sure that the Minister will be interested to hear that his business is the installation of intelligent energy systems, such as wind turbines and solar panels. Those things are relatively heavy, so he needs a 4x4 to tow his trailer to transport the equipment around the country. He says that it is quite obvious which vehicles are genuine utility vehicles and which are not. He thinks that the measure should have created a distinction between sports utility vehicles, which, I suspect, are the vehicles that the Chancellor would wish to attract higher dutyI would have no problem with thatand genuine utility vehicles that are used in business. I urge Ministers to rethink the measure before it is considered in Committee.
	The president of the National Farmers Union, Mr. Peter Kendall, has said:
	We were extremely disappointed to see that no exemption was made for farmers who rely on 4x4 vehicles for their day-to-day livelihood.
	I could not agree more.
	Finally, I would like to raise the issue of the Chancellor's stop-start scheme to promote the use of renewable energy in domestic households, a conversion scheme called the low carbon buildings programme, which many hon. Members, including me, have mentioned in recent weeks. The programme is now known in the trade as fund a fiasco after the managing director of the Renewable Energy Association used the word fiasco to describe the operation of the scheme. The Chancellor has recognised that the scheme was woefully inadequately funded in the first place and was poorly administered. As a result, expectations have been raised among householders across the country: they thought that if they were interested in converting to a renewable energy source, there would be Government money to help them. That is a perfectly reasonable assessment to make, if one reads the Government's promotion of the scheme. However, anyone who tries to use the scheme will find that fewer than 2 per cent. of applicants are lucky enough to get a grant. If the Chancellor were to run the country in the way that he ran the scheme, heaven help us.
	To conclude, the devil is in the detail of the Budget. It raises risk, the country is running on a public finance tightrope, and the Chancellor's micro-managing risks damaging innovation, as I tried to explain. The risk for the Chancellor is that he may think that he has shot the Tory fox, when he has in fact shot himself in the foot. He has conceded the argument: Government spending will grow less than the economy, and he will have to share the proceeds of growth.

Christopher Chope: It is a pleasure to follow my hon. Friend the Member for Ludlow (Mr. Dunne), who delivered an incisive analysis of what lies behind the Chancellor's smoke and mirrors. He drew to our attention, if we did not already know it, the fact that the Chancellor is basically once again raising taxes while saying that he is cutting them. My hon. Friend did not go quite as far as my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), who said that the Chancellor was making a blatant attempt to mislead the public about what he was doing. Those are strong words, but they are highly appropriate in light of what is being done through the Budget, which began unravelling within hours of the Budget statement, and which will be a catalyst in discrediting the Chancellor when he seeks the position of Prime Minister.
	In the four hours or so for which I have been listening to the debate, my hon. Friend the Member for Ludlow and others have shown that they have great experience and knowledge of the world of business. My hon. Friends the Members for Northampton, South (Mr. Binley), for Beverley and Holderness (Mr. Stuart) and for Ludlow have demonstrated that they can operate in, and make a success of, business, thereby creating employment and generating wealth for our country. Is it any surprise that when the Government started in 1997, they said, We're on the side of small business? As part of their promise, the Government said that there would be an annual debate on small business on the Floor of the House, but is it surprising that that promise was abandoned long ago? Obviously, the only people who know anything about small business and the operation of the enterprise society are the people on the Conservative Benches, and that has been demonstrated in this debate.
	The most intellectually stimulating contribution from a Conservative Member this evening was that of my hon. Friend the Member for Gainsborough (Mr. Leigh). He set out his own alternative Budget, which would involve raising the starting point for paying tax to 15,000 in income. That would take 13.5 million people out of tax. It would also raise the starting point for the 40 per cent. rate to 47,000. That is an aspiration, and it should be a policy for the Conservative party. I am delighted that so many members of our Treasury team are present on the Front Bench, including the shadow Chancellor.
	In my remarks I shall concentrate on the issue of air passenger duty. We do ourselves a disservice in the House if we do not show that we are in tune with the concerns of the people out there. There have been full-page advertisements in our popular press over recent weeks expressing concerns about air passenger duty, particularly the increase, which is provided for in resolution 13. The increase will result in an extra 1 billion for the Treasury. What I find particularly offensive is that the increase is retrospective. It goes back to 1 February and therefore breaks new ground for Budget resolutions. That is one of the reasons why, in an Adjournment debate that I was lucky enough to secure I described it as unconstitutional.
	Anyone travelling by air after 1 February has to pay the extra tax, regardless of when the flight was booked. That means that people who booked their flights for the coming spring holiday in, say, October or November, find that when they go to the airport they have to pay extra because of the retrospective legislation. Most of the adverse tax consequences are being borne by individuals. I am sure they will find a way of getting their own back against the Chancellor and this ghastly Government when the next election comes.
	However, there is a significant group of people who do not have that protection. They are the package tour operators. They have taken a financial hit of some 44 million because regulations under the European package holiday regulations prohibit them from passing on the increase to their customers. That is outrageous. Because of the impact on the package holiday industry, when the Conservative Government introduced air passenger duty they gave about one year's notice of its introduction, to deal with those involved in the package holiday business. I am delighted that the package holiday industry is taking the Chancellor to court on the matter, and I wish it well.
	Air passenger duty is offensive not just because it is retrospective. It is a good little earner for the Chancellor. He has presented it as a green tax, but we know that it is no such thing. As a result of the change announced on 6 December, there will be savings of about 0.3 million tonnes of carbon per year by 2010-11. Let us compare that with the latest figures that I have for how many million tonnes of CO2 are emitted by China, India and the United States2,700 million tonnes, and rising by 10 per cent. a year or more. By comparison with that, 0.3 million tonnes by 2010 will hardly change the planet. However, it will provide another 1 billion for the Chancellor's coffers, and we will do the people who are concerned about the matter a disservice if we allow the Chancellor to present air passenger duty as a green tax. It certainly is not. It is just a revenue-raising measure, and an unfair one at that.
	Fortunately, the demand for aviation is inelastic. That means that however much we charge in taxes on aircraft flights, people will not be deterred from using aircraft. That has become apparent from discussions that have been taking place in the House on the European emissions trading scheme and the proposals to extend that to aircraft. If aircraft carbon were charged at 20 a tonne and average load factors of 70 per cent. prevailed, the result would be increases in the cost of an air journey of between 3 and 25. The growth in aviation by 2020 would be 135 per cent. rather than 142 per cent.: in other words, air travel would be double plus one third. There would be a minimal impact on the large growth in aviation. Why? Because of the inelasticity of this particular economic activity.
	The number of passenger journeys from United Kingdom airports is set to increase from 228 million in 2005 to 490 million by 2030. I think that that is jolly good news, because it shows that all those people will be able to enjoy an improved quality of life. They will be able to enrich their experience by travelling and seeing the world. That probably applies to their children as well. Other Members, like me, will have children who, over the coming Easter holidays, will fly to the continent to engage in school exchanges and become more familiar with foreign languages. Why should we think it a bad thing for those children to have the enriching experience of travelling abroad by plane? Why should we tax hard-working families in this way?
	Each year, United Kingdom aviation produces 36 million tonnes of carbon dioxide. At a market price of 10 per tonne, which I think is the current basic market price, aviation would have to contribute 360 million a year to meet its environmental carbon costs. But air passenger duty already yields 1 billion, and the increase proposed in resolution 13 would double that to 2 billion. Far from this being an effort to make the aviation industry pay its environmental costs, the industry will be charged more than five times those costs.
	The tax burden of air passenger duty is disproportionate, and its impact on the environment is minuscule. Less than 1 per cent. of aviation's 36 million tonnes of carbon will be saved. I welcome the realisation in my party that this is not a green tax, and I welcome the publication of the discussion document Greener Skies: A consultation on the environmental taxation of aviation. I welcome the assertion that
	The doubling of APD rates... has attracted controversy due to the short notice and retrospective nature of the increase on passengers who had already booked their flights.

Nicholas Winterton: And paid for them.

Christopher Chope: And paid for them, as my hon. Friend says. I welcome the statement that the controversy
	has refocused attention on more fundamental shortcomings in the design of APD. In particular as a per-passenger tax it is not directly linked to the carbon content of the flight. As a result it provides no incentives for airlines to use more fuel-efficient aircraft or to increase seat-occupancy rates. It also excludes the fast-growing air freight sector.
	I welcome, too, what the document says about the Financial Secretary to the Treasury. It points out that he admits that APD
	is a blunt instrument as far as the environment goes... It is not even the best tax instrument actually to deal with the effects of aviation... In narrow terms it's not specifically a tax that is designed for environmental ends.
	It also quotes the Government's 2003 aviation White Paper as saying
	Because of its blunt nature, APD is not the ideal measure for tackling the environmental impacts of aviation.
	It continues:
	Together with the fact that the tax increase announced in the PBR was not offset by reductions in tax elsewhere, these deficiencies help to undermine public support for APD as an environmental tax and feed suspicions
	I would put it more strongly than that
	that it is simply designed to raise revenues for the Treasury.
	I commend my hon. Friend the shadow Chancellor for that consultation document and his incisive analysis of the defects of APD. When I last heard him speak, I was left in some uncertainty as to whether we would be voting against resolution 13, but I hope that in the light of what he says in the document and our concern about retrospective legislation, he will join me and others in the No Lobby when we vote on it.
	Let me refer to the way in which the Budget has covered up the work of Sir Michael Lyons. His commission was set up in July 2004 to consider the whole issue of how we pay for local government. After almost three years, he reported in a way that many of my elderly constituents would find encouraging. He said that 1.8 million people, mainly poor pensioners, are unable to get the full benefit of the council tax rebate and that as a result there is an enormous extra burden on those poorer members of our communities. He suggests that we should bring in new measures to help those people, who are paying 1.8 billion a year more than they should be because of the inefficiency of the council tax rebate system.
	Sir Michael came forward with the radical ideaI hope that it will be taken up by my hon. Friend the shadow Chancellorof raising the upper capital threshold for entitlement to council tax rebate to 50,000.

Nicholas Winterton: Minimum.

Christopher Chope: Indeed, as a minimum. He goes on to say that over time it could be abolished altogether.
	If the Chancellor had adopted that recommendation from the Lyons report, we might have been able to take seriously his assertion that the Budget was fair and designed to help pensioners and those who are worst off in our society, but of course the report was an embarrassment to him, which is why it has been suppressed. I am concerned that so many people, even some of my hon. Friends, are not yet familiar with Sir Michael's radical and helpful proposals, which would particularly help hard-pressed pensioners with very high council taxes.

Bob Spink: What does my hon. Friend think that his hard-pressed and long-suffering council tax payers, particularly the elderly, would make of the proposals to remove council tax capping or to make additional charges for waste collection, or the proposed tourist tax?

Christopher Chope: They would be rather less enthusiastic about those proposals; indeed, they would think that they smacked of being additional stealth taxes. They would also note with concern that the Lyons report says that in today's terms a local income tax would result in the basic tax rate going up by 7.7p in the pound.
	My last point about Sir Michael Lyons' report is that he suggests the option of helping households that pay an unacceptably high council tax. Paragraph 174 of the executive summary proposes a circuit-breaker rebate to ensure that no householder pays more than a set proportion of income in property tax. I have long argued in favour of such a system. An enormous number of pensioners are, for want of a better expression, in council tax poverty. People are described as being in fuel poverty if they pay more than 10 per cent. of their income towards the cost of their fuel. However, many of my constituents pay much more than 10 per cent. of their net income towards the costs of council tax. They are, therefore, in council tax poverty. Limiting the percentage of income that was attributed to council tax would be a helpful mitigation. Of course, the Chancellor took up none of those suggestions in the Budget, because he is more interested in filling his coffers and deceiving the people.
	If we were in any doubt about the Chancellor's abuse of the English language, let us consider just two things that he said in the Budget speech. He said that
	the amount of cash that can be saved tax-free from 3,000
	will be raised
	by 20 per cent. in April next year to 3,600.
	In his last sentence, he stated that
	I will from next April cut the basic rate of income tax. [Official Report, 21 March 2007; Vol. 458, c. 825-828.]
	Next April is later this week. The Chancellor deliberately used language that must have given the impression that we were considering April this year rather than April next year. No wonder that the quality of education in our country is declining so rapidly when the Chancellor sets such a poor example from the top. Next means next, not the year after next or the April after next. If the Chancellor becomes Prime Minister, I hope that he will pay greater heed to the English language and, in so doing, to the need to increase public confidence in the straight talking of politicians.

Theresa Villiers: It gives me great pleasure to sum up the debate this evening. The Secretary of State for Trade and Industry and my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) began the debate robustly, as one would expect. My hon. Friend spoke about competitiveness and the Budget's impact on small businesses. He raised a range of themes, to which I shall revert throughout my speech.
	The hon. Member for Coventry, North-West (Mr. Robinson) began by defending the Chancellor's sanity and proceeded, slightly oddly, to express some significant reservations about two of the centrepieces of the Budget. Even the Chancellor's friends appear to have reservations about what he produced in the Budget.
	The hon. Member for Twickenham (Dr. Cable) spoke about a range of important issues, including the key fact that the value of take-home pay is now falling in this country. People's weekly wage packet buys them less and less and the retail prices index is at its highest for 16 years.
	The hon. Member for Blaydon (Mr. Anderson) recognised that the Opposition's concerns about the loss of the 10p band had merit. He spoke with passion and commitment about education and the schools in his constituency.
	My right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) produced an analysis of huge insight. The time available makes it impossible to do it justice. He spoke of the benign global economic conditions that the Chancellor has enjoyed and commented on the Chancellor's making a dreadful mess of public finances. He welcomed the Chancellor's recognition that we were right and said that we should share the proceeds of growth.
	The hon. Member for Coventry, South (Mr. Cunningham) spoke about his support for restoring the link between pensions and earnings. My hon. Friend the Member for Gainsborough (Mr. Leigh) talked about the importance of efficiency savings in Government and made a strong plea for progress towards lower taxes.
	The hon. Member for City of Durham (Dr. Blackman-Woods) expressed her concerns about the Government's misconceived planning gain supplement. My hon. Friend the Member for Northampton, South (Mr. Binley) spoke with verve, energy and passion about small business.
	My hon. Friend the Member for Beverley and Holderness (Mr. Stuart) delivered a devastating critique of the Treasury's record on the environment. My hon. Friend the Member for Ludlow (Mr. Dunne) spoke at some length about a range of issues, including sideways loss relief and the Budget's impact on enterprise. My hon. Friend the Member for Christchurch (Mr. Chope) expressed his grave concerns about the tax rises that the Government have introduced.
	This was not a tax-cutting Budget. The Institute for Fiscal Studies has calculated that 3.5 million families will be worse off because of it. Page 279 of the Red Book reveals that tax will be up by 2 billion once all the Budget measures kick in, on top of the 2.4 billion in tax increases already trailed this year in the pre-Budget report and other measures. The Chancellor has raised taxes 99 times since his first Budget 10 years ago and the IFS tells us that the average family is paying 5,600 more tax a year in real terms. The Chancellor is about as credible on tax cuts as the Prime Minister on weapons of mass destruction.
	This Budget was a tax con, not a tax cut. It did not cut taxes on income. Page 208 of the Red Book shows that the 8 billion cost of cutting the basic rate will be more than offset by a 7 billion increase from scrapping the 10p band and a 1 billion increase from raising the national insurance limits. The overall impact of the income and national insurance contributions changes means that working families will be paying 340 million more tax on their income next year.
	It is not the rich who are being hitnot the guys in the City who are paid 22 million. People earning between 5,000 and 18,000 will pay more income tax. Nurses, cleaners, care workers, police community support officers, shop assistants, catering workers: those are the sort of people who are losing out. The Budget involves a transfer of the burden of tax from those on middle incomes to those on low incomes. This is the Budget that Labour Back Benchers cheered, by the Chancellor who claims he wants to tackle poverty.
	The Chancellor seems to think that hitting the poorest with a higher income tax bill is not a problem, because tax credits soften the blow. What he is saying, in effect, is, I'll take away more of your money, but you can have some of it back if you wade through these 72 pages of forms and explanatory notes on tax credits. The Budget will drive more people into the benefits system and into dependency.
	Let us look at the tax credit system that people are being driven into. We support the use of tax credits[Hon. Members: Ah.]but the tax credit system is broken, with 2 billion lost through fraud, nearly a million people underpaid and 2 million overpaid, meaning that half the payments in the system are wrong. Thousands of the most vulnerable people in our society are in desperate straits, driven into the hands of loan sharks when faced with huge overpayment bills that they cannot afford.
	The Budget's increase in the tax credit withdrawal rate will leave many low-income families facing marginal tax rates of 70 per cent. or more as they struggle to lift themselves out of poverty. There are more people in deep poverty now than there were when the Chancellor gave his first Budget 10 years ago. Figures released today show the incomes of the poorest 20 per cent. falling and poverty increasing. How right the right hon. Member for Darlington (Mr. Milburn) was when he said that poverty has become more entrenched under Labour.
	This Budget was not about tax reform. No Budget can claim to be simplifying when it increases dependency on highly complex tax credits. There are, it is true, some modest steps in the Budget towards tax simplification. We have put the issue at the top of our agenda and it is good news that the Chancellor has been pulled along in the wake of my hon. Friend the Member for Tatton (Mr. Osborne), but these limited reforms cannot make up for the continual meddling and instability that has characterised our tax system since the Chancellor's first Budget.
	We have slipped to 67th in the world league table on simplicity, so 66 countries now have a simpler and more rational tax system than we doincluding Cambodia. The length of the direct tax code has doubled1,000 years of tax law doubled in a little under 10 years. This year's Finance Bill might even see us overtake India and give us the longest tax code in the world.
	This was not a budget for business. It is true that we welcome some of the changes made to the taxation of large businesses. We have been examining the case for a reduction in the headline rate of corporation tax, funded by scrapping some of the complex reliefs that have multiplied under the Chancellor. Last week, we called on him to do that and he has responded, but, frankly, the impact will be limited when set against 50 billion in extra business taxes levied since 1997. Overall, taxes on business will be up by 1 billion next year.
	The Chancellor may have taken some of our advice on large companies, but he has headed in the opposite direction on smaller companies. He has raised rates and made the system more complicated, so we will be voting against his proposals on small business. After 11 Budgets, six rate changes and a cycle of continuing revolution worthy of Chairman Mao, never mind Stalin, he is almost back where he started on small company taxation, except that small businesses will be paying more tax in a more complex and unstable system.
	Small businesses employ 58 per cent. of private sector workers, which is more than 12 million people. Those businesses are not only a crucial source of enterprise and innovation, and the big companies of the future, but the bedrock of our local communities. The people who will lose out in a big way because of this Budget are hairdressers, newsagents, caterers and small retailers, who are already struggling with falling living standards and rising inflation.
	Some 10,000 small local shops have closed since 2000. How many struggling suburban high streets will face further decline as a result of this tax hit? How many more village shops and local post offices will face closure? The Chancellor claims that new allowances mean that businesses that invest will not lose out, but how can a small suburban post office shell out thousands of pounds in investment to make up for the Chancellor's tax grab?
	The Chancellor has delivered a double whammy with a new tax hit on contractors through managed service companies. David Frost of the British Chambers of Commerce has said:
	This is a substantial rise and will hit those looking to grow their business.
	Paula Tallon of Chiltern tax advisers has summed it up:
	Small companies are getting thumped again.
	This was not a Budget for enterprise and competitiveness. With the thumping that business has received from the Chancellor in higher taxes, a more complicated tax system and a massive increase in regulation, it is no wonder that business investment has slipped below 10 per cent. of GDP for the first time since records began, that productivity growth has stagnated in Britain, that we have dropped from fourth to 10th in the world league table on competitiveness, that the UK grew more slowly last year than 21 other members of the EU, and that unemployment rose more quickly in Britain last year than anywhere else in the developed world.
	This was not a Budget for saving and pensions, either. The Red Book contains the melancholy news that the savings ratio has virtually halved since the Chancellor's first Budget, in which he dealt a body blow to savings in Britain with his 100 billion raid on pension funds. That was followed by recurring and damaging instability in pensions tax, culminating in the predictable mess that he made this year of pensions term assurance.
	The Chancellor announced new money for those who have lost their pensions, which we welcome, but he failed to point out that that would be spread over 60 years. The net present value of the new money was barely a third of the figure that he announced with a flourish on Budget day. Ros Altmann's verdict was:
	Today's announcement does nothing for most of those who are struggling without their pensions today...This is typical Gordon Browntrying to get good headlines when the reality is not good. People are still suffering.
	This was not a Budget for education. The promised bonanza for education spending has turned out to be a modest increase of just less than 2.5 per cent. Over-hyped announcements on spending cannot disguise the scandal that one in six young people leave school unable to read, write or add up properly and that 100,000 14-year-olds have the reading age of a seven-year-old.

Rob Marris: If it is all such doom and gloom, how can the hon. Lady explain 2.5 million more jobs and the fact that the United Kingdom has gone from seventh to second in GDP per capita in the G7? Is it really all such doom and gloom? I do not think so.

Theresa Villiers: We are lagging. We are 22nd out of 27 members of the EU in terms of growth, and unemployment grew more quickly in this country last year than anywhere else in the developed world.
	Truancy is at record levels. Those children have spent almost their whole education under a Labour Government, who have failed them.
	This was not a Budget for the NHS. For the second year in a row, the NHS barely got a mention. With junior doctors facing unemployment and emergency departments and maternity units threatened with closure across the nationLabour Members know the situation very wellthe question everyone is asking is: where has all the money gone? How can this Chancellor have spent so much and achieved so little? He has wasted money on an industrial scale. He has spent 4 trillion of taxpayers' money, which is money earned by hard-working men and women up and down this country. Now, after years of falsely accusing us of wanting to cut spending on public services, he has finally seen the light. He is raising public spending but more slowly than the growth rate in the economy. He is sharing the proceeds of growth.

Stephen Timms: Given that the hon. Lady says that our public spending projections are consistent with her third fiscal rule, will she commit her party to match them?

Theresa Villiers: We will certainly match the announcement on education. As for the rest, we want to wait for your comprehensive spending review. You must produce the CSR, and we will produce [Interruption.] I apologise, Mr. Deputy Speaker. When the Chief Secretary produces the CSR, we will produce our spending plans.
	This Budget was not about economic stability. It was not about the environment. It was not about bringing people out of poverty. It was not about jobs and enterprise or competing with China and India. It was not about schools or the NHS. It was not about tax reform. It certainly was not about tax cuts. This Budget was all about politics. It was a tax con, not a tax cut. It was a continuation of the spin and dissembling that have characterised the new Labour project from the day that the Chancellor and the Prime Minister first dreamed it up. It was a cheap political sleight of hand and the British people have not been taken in by it. They know that if they want change, they will have to vote for change, and for a change of Government, not just a change of Prime Minister. I believe that one day very soon, they will.

Stephen Timms: We have had a memorable Budget and an interesting debate, and I thank all those who have contributed to it over the past four days.
	The Budget contained personal tax reductions for families and pensioners and to help make work pay, tax simplification and reform to boost businesses, new UK leadership on climate change, and, crucially, additional resources to invest in public services and Britain's future competitiveness.
	The package of 2.5 billion worth of reductions in personal taxation to offer more support for families with children, for pensioners and to make work pay, is funded within a broadly fiscally neutral Budget. My right hon. Friend the Chancellor, at the outset of his speech, made the position clear:
	Let me be absolutely clear...changes that I make today will be broadly neutral for the public finances and overall. [ Official Report, 21 March 2007; Vol. 458, c. 819.]
	The Conservative party did not understand it, but everyone else certainly did.

Tony Lloyd: Does the Chief Secretary realise that while the attack on the Chancellor's Budget by both the Liberal Democrats and the Conservatives was almost entirely political, it is nevertheless frightening for those on low household incomes to be told that they will lose money because of tax changes? Can he confirm that, in constituencies such as mine, which have many poor families, no household will lose out because of the Budget?

Stephen Timms: I cannot say that. I can say, however, that most households are better off. Let me quote what the Institute for Fiscal Studies has said:
	The income tax and NI package has been cleverly designed to limit the number of losers.
	Indeed, the gains are particularly concentrated in the lowest income deciles. Our policy is to give extra help to families, to do more to lift children out of poverty and to protect the position of pensioners, and that is what the package does.

David Gauke: Given that the Chief Secretary has quoted the Institute for Fiscal Studies, will he also confirm that it said that 3.5 million households will be worse off as a consequence of the tax changes in the Budget?

Stephen Timms: What I can confirm is that there are more gainers than losers in every single income decile, and that the position set out by a number of speakers in the debate was very misleading.

Theresa Villiers: Will the Chief Secretary confirm that a single person without children who earns less than 18,000 a year will be worse off as a result of the Budget?

Stephen Timms: No, that is certainly not necessarily the case. The hon. Lady should support the Budget; under its measures, 200,000 children will be lifted out of poverty. The Budget also strengthens incentives to work, building on past progressthere have been 2.6 million more jobs since 1997.

Brian Binley: Will the Chief Secretary give way?

Stephen Timms: I will not give way for the moment. In terms of what I was talking about, the increase in the national minimum wage this October to 5.52 per hour will further help.
	There was also a fiscally neutral package of simplification and reform of the corporate tax system to boost businesses and growth.  [Interruption.] It was a fiscally neutral package. I am glad that the reduction in the main company rate has been broadly welcomed. The increase in the small company rate is balanced by the new 50,000 investment allowances.

Several hon. Members: rose

Stephen Timms: I will give way one more time, after which I will make some progress.

Adam Afriyie: I thank the Chief Secretary for giving way. Will he confirm that a 16 per cent. increase in corporation tax on small businesses is indeed a tax increase?

Stephen Timms: But that change is offset.  [Interruption.] Small businesses that invest will pay less tax as a result of the package. Figures released today show [Interruption.] They show that there has been a big increase in business investment, which the Budget will strengthen further. Also [Interruption.]

Mr. Deputy Speaker: Order. I am sorry to interrupt the right hon. Gentleman, but the House should let the debate finish in a dignified manner. The Chief Secretary is winding up the debate; let him be heard.

Stephen Timms: Thank you, Mr. Deputy Speaker.
	The Budget also addressed the challenge of climate change and the increasing pressure on natural resources. I wish to highlight the international aspects of the Budget statement. There will be a new international environmental transformation fund, with a first allocation to tackle deforestation in the Congo rainforest, and we intend to host an international conference this year on global carbon trading, at which we will want to build on London's pre-eminence in that area. Taken together, the Budget will deliver 6 million tonnes of carbon savings while strengthening UK leadership in the very important international decisions on climate change.
	The Budget will equip the UK for future challenges with new investment. The hon. Member for Chipping Barnet (Mrs. Villiers) was unwilling to commit her party to match our public spending projections set out in the Red Book.  [Interruption.] Yes, we have; the total envelope of projections was set out in the Red Book. The hon. Lady has declined to match that, and I will return to that point.
	The Opposition have said that the Budget is all smoke and mirrors; that point was made in tonight's debate. I am pleased to be able to say that the public have seen through that false claim. What the Budget does is clear, so it is no surprise that a poll in  The Independent tomorrow morning shows a precipitate decline in the Tory party's lead.
	Of course, the context for the Budgetthe reason why it was possibleis the remarkable transformation that there has been in the UK economy over the past decade. Before 1997, we had the least stable economy in the G7 on the inflation measure. Since then, we have been the most stable on every single measure. UK gross domestic product per capita used to be the lowest in the G7; now it is the second highest. This year, growth is forecast to be higher in the UK than in any other G7 country, and employment in Britain is now above 29 million for the first time ever.
	It is not necessary just to take my word for all of that. Let us look at what the International Monetary Fund said in its report last month on the UK economy. It referred to a
	decade-long record of strong and steady macroeconomic performance,
	and it pointed out that
	growth of real GDP per capita was higher and less volatile than in any other G7 country.
	Such comments were never made when the Conservative party was in charge. Locking that stability in, avoiding any risks to it and sticking to our fiscal rules are immovable constraints around which the Budget has been constructed.
	I am pleased that we have had the opportunity to address sharing the proceeds of growthalthough I thought that more Conservative Members would talk about that. The first thing that we need to say about their proposed third fiscal rule is that the renewal of public services that we have witnessed over the past decade would have been completely impossible had it been in place. To insist that, whatever the circumstances, public spending must always and irrevocably fall as a share of GDP is utter folly. That was the policy of the Tory party in 1992. Its manifesto said:
	We believe that government should not gobble up all the proceeds of growth...our policy is therefore to reduce the share of national income taken by the public sector.
	It is the same policy now as thenI do not know whether the shadow Chancellor wrote itand one would think that the Tories would have learned from the failure of their policy in the early 1990s. It put public services on their knees, and it would do the same again if it were tried once more.
	The leader of the Conservatives has indicated that he envisages the proceeds of growth being split 50:50. That would mean reducing spending in 2010-11 by 31 billion, below the projection in the Red Book. Perhaps the hon. Member for Chipping Barnet will tell us later whether that is what she envisages.

Nick Palmer: Does the Chief Secretary not agree that, in fairness to the Conservatives, we should accept that they would like to reduce taxes, but that unfortunately, because their policies always lead to increased unemployment, they never have the money to do it?

Stephen Timms: My hon. Friend is absolutely right about the record of Conservative Governments and the disastrous impact on public services in the UK.
	We had a number of interesting speeches during today's debate. The hon. Member for Hertford and Stortford (Mr. Prisk) asked me how many pages there would be in Tolleys tax guide by next year. The Finance Bill, which will be published on Thursday, will be a single volume, and I am sure that he will be able to work out the impact on Tolleys. The hon. Member for Twickenham (Dr. Cable) helpfully acknowledged, as he generally does, the sound condition of the economy, but his characterisation of the impact of the 2.5 billion personal tax reduction package was very unfair.
	In this Budget, the Government have set out their approach to building Britain's long-term future, locking in this decade-long record of strong and steady growth that has so transformed the country's economic prospects.

Several hon. Members: rose

Stephen Timms: I shall give way once more, and then I must make some progress.

Jim Devine: I am very grateful to my right hon. Friend for giving way. He talks about building Britain. Is he as astonished as I am that, whereas we are reducing income tax by 2p in the pound, the Scottish National party want to increase it by 3p? That would destroy Britain.

Stephen Timms: My hon. Friend is absolutely right. That policy makes no sense at all, and I know that his views will be endorsed across Scotland.
	As I was saying, we will lock in this decade-long record of strong and steady growth that has so transformed the country's economic prospects, enhance fairness through the Budget, lift another 200,000 children out of poverty, take 600,000 pensioners out of tax altogether, secure UK competitiveness in investment and employment, build on the record number of people in jobs in Britain today, lead on the worldwide effort to secure a global carbon market, address the challenges of climate change, and invest for Britain's future, particularly in education and in science.
	We have set out our figures in the Budget. This year, spending on public services will be 552 billion. I wonder whether the Opposition support that, given that their fiscal rule would have forced spending to be cut by 21 billion this year.

Graham Stuart: I am extremely grateful to the Chief Secretary for giving way. Independent commentators assess the cumulative impact of the Chancellor's pension tax at 100 billion. Can the Chief Secretary give us his estimate of the pension tax's impact on the savings of hard-working people throughout this country?

Stephen Timms: I do not agree with the hon. Gentleman's figure. I refer him to Lord Turner's report and I hope that he will support the reforms to the pension system that we will take forward.
	Public expenditure next year will rise by 34 billion to 587 billion. Do the Tories support that figure, when they have a third fiscal rule that requires only half of growth to go to spending, and at the same time they want to cut corporation tax further and refund North sea oil companies to the tune of 2 billion? In 2008-09, public expenditure will rise by 29 billion to 615 billion. Do the Tories support that, given that they have said that they would have a cut in stamp duty on shares, worth 4 billion to 5 billion a year on top, of course, of the third fiscal rule and the further corporation tax cut?

Ben Wallace: All over the world the brave men and women of the British armed forces are serving our country and doing this Government's bidding. Why is it that our privates and troopers, who bear that heavy burden, will have to pay more tax after the Budget? Is that any way to reward them?

Stephen Timms: I invite the hon. Gentleman to look at the details of the package and see, in particular, how helpful it is in improving incentives to work, and providing extra support for families with children, and pensioners. I notice that the hon. Gentleman has not wanted to support the public spending totals that we published in our Budget Red Book.
	In 2010, public spending will rise by an additional 29 billion to 674 billion, as we continue to invest in the future. Do the Tories support that figure, given that they have to meet the third fiscal rule, and pay for corporation tax cuts, stamp duty cuts and a married couple's allowance? If they cannot make a commitment to meet our spending totals, and they have not done so in this debate, we will draw the conclusion that the country will drawthat in every constituency there will be cuts in schools and hospitals.
	We will have increased education spending by 14 billion by 2010. We have cut pupil-teacher ratios, we have spent more than 20 per cent. extra per pupil and we have cut the basic rate of tax to 20p. We have delivered stability, affordable tax cuts and increases in spending. This Budget secures those achievements and I commend it to the House.
	 Question put and agreed to.
	 Resolved,
	1. Amendment of the Law
	(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.
	(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide
	(a) for zero-rating or exempting a supply, acquisition or importation,
	(b) for refunding an amount of tax,
	(c) for any relief, other than a relief that
	(i) so far as it is applicable to goods, applies to goods of every description, and
	(ii) so far as it is applicable to services, applies to services of every description.
	2. Income tax (charge and rates for 2007-08)
	 Resolved,
	That income tax is charged for the tax year 2007-08; and for that tax year
	(a) the starting rate is 10%,
	(b) the basic rate is 22%, and
	(c) the higher rate is 40%.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	3. Corporation tax (charge and main rates for financial year 2008)
	 Resolved
	That corporation tax is charged for the financial year 2008; and for that year the rate of corporation tax is
	(a) 28% on profits of companies other than ring fence profits, and
	(b) 30% on ring fence profits of companies.
	4. Corporation tax (small companies' rates and fractions for financial year 2007)
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 51(3)(Ways and means motions),
	That for the financial year 2007
	(a) the small companies' rate is 20% on profits of companies other than ring fence profits and 19% on ring fence profits of companies, and
	(b) the fraction mentioned in section 13(2) of the Income and Corporation Taxes Act 1988 is l/40th in relation to profits of companies other than ring fence profits and 1 l/400ths in relation to ring fence profits of companies.
	 The House proceeded to a Division.

Mr. Deputy Speaker: I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.

The House having divided: Ayes 295, Noes 232.

Question accordingly agreed to.
	5. Inheritance tax (rates and bands for 2010-11)
	 Resolved,
	That provision may be made for substituting the Table in Schedule 1 to the Inheritance Tax Act 1984 in relation to chargeable transfers made on or after 6th April 2010.
	6. Rates of duty on alcoholic liquor
	 Resolved,
	That
	(1) The Alcoholic Liquor Duties Act 1979 is amended as follows.
	(2) In section 36(lAA)(a) (standard rate of duty on beer), for 13.26 substitute 13.71.
	(3) In section 62(1 A) (rates of duty on cider)
	(a) in paragraph (a) (rate of duty per hectolitre in the case of sparkling cider of a strength exceeding 5.5 per cent), for 166.70 substitute 172.33,
	(b) in paragraph (b) (rate of duty per hectolitre in the case of cider of a strength exceeding 7.5 per cent which is not sparkling cider), for 38.43 substitute 39.73, and
	(c) in paragraph (c) (rate of duty per hectolitre in any other case), for 25.61 substitute 26.48.
	(4) For Part 1 of the Table in Schedule 1 substitute
	
		
			  Part 1 
			  Wine and Made-wine of a Strength not exceeding 22 per cent. 
			  Description of wine or made-wine  Rates of duty per hectolitre 
			
			 Wine or made-wine of a strength not exceeding 4 per cent. 54.85 
			 Wine or made-wine of a strength exceeding 4 per cent. but not exceeding 5.5 per cent. 75.42 
			 Wine or made-wine of a strength exceeding 5.5 per cent. but not exceeding 15 per cent and not sparkling. 177.99 
			 Sparkling wine or sparkling made-wine of a strength exceeding 5.5 per cent. but less than 8.5 per cent. 172.33 
			 Sparkling wine or sparkling made-wine of a strength of 8.5 per cent. or of a strength exceeding 8.5 per cent but not exceeding 15 per cent. 227.99 
			 Wine or made-wine of a strength exceeding 15 per cent. but not exceeding 22 per cent. 237.31 
		
	
	(5) The amendments made by this Resolution come into force on 26th March 2007.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	7. Rates of tobacco products duty
	 Resolved,
	That
	(1) For the Table in Schedule 1 to the Tobacco Products Duty Act 1979 there is substituted
	
		
			  Table 
			 1. Cigarettes An amount equal to 22 per cent. of the retail price plus 108.65 per thousand cigarettes. 
			 2. Cigars 158.24 per kilogram. 
			 3. Hand-rolling tobacco 113.74 per kilogram. 
			 4. Other smoking tobacco and chewing tobacco 69.57 per kilogram. 
		
	
	(2) The amendment made by this Resolution comes into force at 6p.m. on 21st March 2007.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	8. Rates of gaming duty
	 Resolved,
	That provision may be made for and in connection with replacing the Table in section 11(2) of the Finance Act 1997.
	9. Remote gaming duty
	 Resolved,
	That provision may be made for a duty on remote gaming.
	10. Amusement machine licence duty
	 Resolved,
	That
	(1) In section 23(3) of the Betting and Gaming Duties Act 1981, in the definition of Category C, in paragraph (ii)(b), for 25 there is substituted 35.
	(2) The amendment made by this Resolution comes into force on 22nd March 2007.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	11. Fuel duty rates and rebates
	 Resolved,
	That provision may be made amending rates of duty and rebate in the Hydrocarbon Oil Duties Act 1979.
	12. Rates of vehicle excise duty
	 Resolved,
	That
	(1) Schedule 1 to the Vehicle Excise and Registration Act 1994 (annual rates of duty) is amended as follows.
	(2) In paragraph 1 (general)
	(a) in sub-paragraph (2) (vehicle not covered elsewhere in Schedule otherwise than with engine cylinder capacity not exceeding l,549cc), for 175 substitute 180, and
	(b) in sub-paragraph (2A) (vehicle not covered elsewhere in Schedule with engine cylinder capacity not exceeding l,549cc), for 110 substitute 115.
	(3) Paragraph IB (graduated rates for light passenger vehicles) is amended as follows.
	(4) For the words from Table A to date, substitute the following table.
	(5) For , or is liable to the standard rate or the premium substitute or is liable to the standard.
	(6) For Tables A and B substitute
	
		
			  Table 
			  CO 2  emissions figure  Rate 
			 (1) (2) (3) (4) 
			 Exceeding Not exceeding Reduced rate Standard rate 
			 g/km g/km   
			 100 120 15 35 
			 120 150 95 115 
			 150 165 120 140 
			 165 185 145 165 
			 185 225 190 205 
			 225 - 285 300 
		
	
	The table has effect in relation to vehicles first registered before 23rd March 2006 as if
	(a) in column (3), in the last row, 190 were substituted for 285, and
	(b) in column (4), in the last row, 205 were substituted for 300.
	(7) For paragraphs ID and IE substitute
	 The standard rate
	ID A vehicle is liable to the standard rate of duty if it does not qualify for the reduced rate of duty.
	(8) In paragraph U (light goods vehicles)
	(a) in sub-paragraph (a) (vehicle which is not lower-emission van), for 170 substitute 175, and
	(b) in sub-paragraph (b) (lower-emission van), for 110 substitute 115.
	(9) In paragraph 2(1) (motorcycles)
	(a) in paragraph (b) (motorbicycle and engine's cylinder capacity more than 150cc but not more than 400cc), for 31 substitute 32,
	(b) in paragraph (c) (motorbicycle and engine's cylinder capacity more than 400cc but not more than 600cc), for 46 substitute 47, and
	(c) in paragraph (d) (any other case), for 62 substitute 64.
	(10) The amendments made by this Resolution have effect in relation to licences taken out on or after 22nd March 2007.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	13. Rates of air passenger duty
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 51(3) (Ways and means motions),
	That
	(1) Section 30 of the Finance Act 1994 (rates of air passenger duty) is amended as follows.
	(2) In subsection (3A) (destinations in EEA States and qualifying territories etc)
	(a) in paragraph (a) (standard class travel), for kt5 substitute 10, and
	(b) in paragraph (b) (any other case), for 10 substitute 20.
	(3) In subsection (4) (other destinations)
	(a) in paragraph (a) (standard class travel), for 20 substitute 40, and
	(b) in paragraph (b) (any other case), for 40 substitute 80.
	(4) The amendments made by this Resolution have effect in relation to any carriage of a passenger on an aircraft which begins on or after 1st February 2007.
	(5) But if the amount of duty due from any operator in the accounting period ending before 21 st March 2007 increased as a result of those amendments, the operator is to pay the amount of that increase as if it became due in the first accounting period ending after that day.
	(6) Expressions which are used in paragraph (5) and in the Air Passenger Duty Regulations 1994 have the same meaning in that paragraph as in those regulations.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	 The House divided: Ayes 296, Noes 84.

Question accordingly agreed to.
	14. Rates of climate change levy
	 Resolved,
	That provision may be made about the rates of climate change levy.
	15. Rate of aggregates levy
	 Resolved,
	That provision may be made about the rate of aggregates levy.
	16. Rate of landfill tax (2007)
	 Resolved,
	That
	(1) In section 42 of the Finance Act 1996 (amount of landfill tax), in
	(a) subsection (l)(a) (the standard rate), and
	(b) subsection (2) (reference to the standard rate taken to be 2 in cases of disposals of qualifying material), for 21 there is substituted 24.
	(2) The amendments made by this Resolution have effect in relation to disposals made (or treated as made) on or after 1st April 2007.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	17. Rates of landfill tax (after 2007)
	 Resolved,
	That provision may be made about the rates of landfill tax.
	18. Emissions trading
	 Resolved,
	That provision may be made for the imposition of charges by the allocation of Community tradeable emissions allowances in return for payment.
	19. Climate change levy (reduced-rate supplies etc)
	 Resolved,
	That provision may be made amending Schedule 6 to the Finance Act 2000 in relation to reduced-rate supplies and exemptions.
	20. Landfill tax (bodies concerned with the environment)
	 Resolved,
	That
	(1) In section 53(4) of the Finance Act 1996 (credit: bodies concerned with the environment), after paragraph (c) there is inserted
	(ca) provision for an environmental body to be and remain approved only if it complies with conditions imposed from time to time by the regulatory body or for the regulatory body to be and remain approved only if it complies with conditions imposed from time to time by the Commissioners (including provision for the variation or revocation of such conditions);.
	(2) The amendment made by this Resolution comes into force on 22nd March 2007.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	21. Managed service companies (earnings from employment)
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 51(3) (Ways and means motions),
	That
	(1) The Income Tax (Earnings and Pensions) Act 2003 is amended as follows.
	(2) In section 7(5) (meaning of employment income etc), for paragraph (a) substitute
	(a) Chapters 7 to 9 of this Part (agency workers, workers under arrangements made by intermediaries, and workers providing services through managed service companies),.
	(3) In section 48(2) (workers under arrangements made by intermediaries: scope of Chapter) for the or at the end of paragraph (a) substitute
	 (aa) applies to services provided by a managed service company (within the meaning of Chapter 9 of this Part), or.
	(4) After section 61 insert
	CHAPTER 9
	MANAGED SERVICE COMPANIES
	 Application of this Chapter
	61A Scope of this Chapter
	(1) This Chapter has effect with respect to the provision of services by a managed service company.
	(2) Nothing in this Chapter
	(a) affects the operation of Chapter 7 of this Part (agency workers), or
	(b) applies to payments or transfers to which section 966(3) or (4) of ITA 2007 applies (visiting performers: duty to deduct and account for sums representing income tax).
	61B Meaning of managed service company
	(1) A company is a managed service company if
	(a) its business consists wholly or mainly of providing (directly or indirectly) the services of an individual to other persons,
	(b) payments are made (directly or indirectly) to the individual (or associates of the individual) of an amount equal to the greater part or all of the consideration for the provision of the services,
	(c) the way in which those payments are made would result in the individual (or associates) receiving payments of an amount (net of tax and national insurance) exceeding that which would be received (net of tax and national insurance) if every payment in respect of the services were employment income of the individual, and
	(d) a person who carries on a business of promoting or facilitating the use of companies to provide the services of individuals (an MSC provider) is involved with the company.
	(2) An MSC provider is involved with the company if the MSC provider or an associate of the MSC provider
	(a) benefits financially on an ongoing basis from the provision of the services of the individual,
	(b) influences or controls the provision of those services,
	(c) influences or controls the way in which payments to the individual (or associates of the individual) are made,
	(d) influences or controls the company's finances or any of its activities, or
	(e) gives or promotes an undertaking to make good any tax loss.
	(3) A person does not fall within subsection (l)(d) merely by virtue of providing legal or accountancy services in a professional capacity.
	(4) A person does not fall within subsection (l)(d) merely by virtue of carrying on a business consisting only of placing individuals with persons who wish to obtain their services (including by contracting with companies which provide their services); but this subsection does not apply if the person, or an associate of the person, does anything within any of paragraphs (c) to (e) of subsection (2).
	61C Section 61B: supplementary
	(1) The Treasury may by order provide that persons of a prescribed description do not fall within section 61B(l)(d).
	(2) An order under subsection (1) may be made so as to have effect in relation to the whole of the tax year in which it is made.
	(3) In section 6IB and this section, company means a body corporate or partnership.
	(4) References in section 6IB to an associate of a person (P) include a person who, for the purpose of securing that the individual's services are provided by a company, acts in concert with P (or with P and other persons).
	(5) In section 61B(2)(e), undertaking to make good any tax loss means an undertaking (in any terms) to make good (in whole or in part, and by any means) any cost to the individual or an associate of the individual resulting from a relevant provision, or a particular kind of relevant provision, applying in relation to payments made to the individual or associate.
	(6) In subsection (5) relevant provision means
	(a) a provision of the Tax Acts,
	(b) an enactment relating to national insurance, or
	(c) a provision of subordinate legislation made under any such provision or enactment.
	 The deemed employment payment 
	61D Worker treated as receiving earnings from employment
	(1) This section applies if
	(a) the services of an individual (the worker) are provided (directly or indirectly) by a managed service company (the MSC),
	(b) the worker, or an associate of the worker, receives (from any person) a payment or benefit which can reasonably be taken to be in respect of the services, and
	(c) the payment or benefit is not earnings (within Chapter 1 of Part 3) received by the worker directly from the MSC.
	(2) The MSC is treated as making to the worker, and the worker is treated as receiving, a payment which is to be treated as earnings from an employment (the deemed employment payment).
	(3) The deemed employment payment is treated as made at the time the payment or benefit mentioned in subsection (l)(b) is received.
	(4) In this Chapter
	the worker has the meaning given by subsection (1),
	the relevant services means the services mentioned in that subsection, and
	the client means the person to whom the relevant services are provided.
	(5) Section 61F supplements this section.
	61E Calculation of deemed employment payment
	(1) The amount of the deemed employment payment is the amount resulting
	from the following steps
	 Step 1
	Find (applying section 6IF) the amount of the payment or benefit mentioned in section 61D(l)(b).
	 Step 2
	Deduct (applying Chapters 1 to 5 of Part 5) the amount of any expenses met by the worker that would have been deductible from the taxable earnings from the employment if
	(a) the worker had been employed by the client to provide the relevant services, and
	(b) the expenses had been met by the worker out of those earnings.
	If the result at this point is nil or a negative amount, there is no deemed employment payment.
	 Step 3
	Assume that the result of step 2 represents an amount together with employer's national insurance contributions on it, and deduct what (on that assumption) would be the amount of those contributions.
	The result is the deemed employment payment.
	(2) In step 2 of subsection (1), the reference to expenses met by the worker includes, where the MSC is a partnership and the worker is a member of the partnership, expenses met by the worker for and on behalf of the partnership.
	(3) In step 2 of subsection (1), the expenses deductible include the amount of any mileage allowance relief which the worker would have been entitled to in respect of the use of a vehicle falling within subsection (4) if
	(a) the worker had been employed by the client to provide the relevant services, and
	(b) the vehicle had not been a company vehicle (within the meaning of Chapter 2 of Part 4).
	(4) A vehicle falls within this subsection if
	(a) it is provided by the MSC for the worker, or
	(b) where the MSC is a partnership and the worker is a member of the partnership, it is provided by the worker for the purposes of the business of the partnership.
	(5) For the purposes of subsection (1) any necessary apportionment of payments or benefits that are referable partly to the provision of the relevant services and partly to other matters is to be made on a just and reasonable basis.
	61F Sections 61D and 61E: application of rules relating to earnings from employment
	(1) The following provisions apply for the purposes of sections 61D and 6 IE.
	(2) A payment or benefit means anything that, if received by an employee for performing the duties of an employment, would be general earnings from the employment.
	(3) The amount of a payment or benefit is taken to be
	(a) in the case of a payment or cash benefit, the amount received, and
	(b) in the case of a non-cash benefit, the cash equivalent of the benefit.
	(4) The cash equivalent of a non-cash benefit is taken to be
	(a) the amount that would be general earnings if the benefit were general earnings from an employment, or
	(b) in the case of living accommodation, whichever is the greater of that amount and the cash equivalent determined in accordance with section 398(2).
	(5) A payment or benefit is treated as received
	(a) in the case of a payment or cash benefit, when payment is made of or on account of the payment or benefit;
	(b) in the case of a non-cash benefit, when it would have been treated as received for the purposes of Chapter 4 or 5 of this Part (see section 19 or 32) if
	(i) the worker had been an employee, and
	(ii) the benefit had been provided by reason of the employment.
	61G Application of Income Tax Acts in relation to deemed employment
	(1) The Income Tax Acts (in particular, the PA YE provisions) apply in relation to the deemed employment payment as follows.
	(2) They apply as if
	(a) the worker were employed by the MSC to provide the relevant services, and
	(b) the deemed employment payment were a payment by the MSC of earnings from that employment; but this is subject to subsection (3).
	(3) No deduction under Part 5 (deductions allowed from employment income) or section 232 (mileage allowance relief) may be made from the deemed employment payment.
	(4) The worker is not chargeable to tax in respect of the deemed employment payment if, or to the extent that, by reason of any combination of the factors mentioned in subsection (5), the worker would not be chargeable to tax if
	(a) the worker were employed by the client to perform the relevant services, and
	(b) the deemed employment payment were a payment by the client of earnings from that employment.
	(5) The factors are
	(a) the worker being resident, ordinarily resident or domiciled outside the United Kingdom,
	(b) the client being resident or ordinarily resident outside the United Kingdom, and
	(c) the relevant services being provided outside the United Kingdom.
	(6) Where the MSC is a partnership and the worker is a member of the partnership, the deemed employment payment is treated as received by the worker in the worker's personal capacity and not as income of the partnership.
	(7) Where
	(a) the worker is resident in the United Kingdom, and
	(b) the relevant services are provided in the United Kingdom, the MSC is treated as having a place of business in the United Kingdom, whether or not it in fact does so.
	 Supplementary provisions
	61H Relief in case of distributions by managed service company
	(1) A claim for relief may be made under this section where the MSC
	(a) is a body corporate,
	(b) is treated as making a deemed employment payment in any tax year, and
	(c) either in that tax year (whether before or after that payment is treated as made), or in a subsequent tax year, makes a distribution (a relevant distribution).
	(2) A claim for relief under this section must be made
	(a) by the MSC by notice to an officer of Revenue .and Customs, and
	(b) within 5 years after 31st January following the tax year in which the distribution is made.
	(3) If on a claim being made an officer of Revenue and Customs is satisfied that relief should be given in order to avoid a double charge to tax, the officer must direct the giving of such relief by way of amending any assessment, by discharge or repayment of tax, or otherwise, as appears to the officer appropriate.
	(4) Relief under this section is given by setting the amount of the deemed employment payment against the relevant distribution so as to reduce the distribution.
	(5) In the case of more than one relevant distribution, an officer of Revenue and Customs must exercise the power conferred by this section so as to secure that so far as practicable relief is given by setting the amount of a deemed employment payment
	(a) against relevant distributions of the same tax year before those of other years,
	(b) against relevant distributions received by the worker before those received by another person, and
	(c) against relevant distributions of earlier years before those of later years.
	(6) Where the amount of a relevant distribution is reduced under this section, the amount of any associated tax credit is reduced accordingly.
	61I Meaning of associate
	(1) Subsections (2) to (4) apply for the purposes of this Chapter.
	(2) Associate, in relation to an individual, means
	(a) a member of the individual's family or household,
	(b) a relative of the individual,
	(c) a partner of the individual, or
	(d) the trustee of any settlement in relation to which the individual, or a relative of the individual or member of the individual's family (living or dead), is or was a settlor.
	(3) Associate, in relation to a company, means a person connected with the company.
	(4) Associate, in relation to a partnership, means any associate of a member of the partnership.
	(5) If
	(a) a managed service company (the MSC) is a partnership, and
	(b) a person is an associate of another person by virtue only of being a member of the partnership,
	the person is to be treated, for the purposes of this Chapter as it applies in relation to the MSC, as if he were not an associate of that other person.
	(6) In subsection (2), relative means ancestor, lineal descendant, brother or sister.
	(7) For the purposes of subsection (2)
	(a) a man and woman living together as husband and wife are treated as if they were married to each other, and
	(b) two persons of the same sex living together as if they were civil partners of each other are treated as if they were civil partners of each other.
	61J Interpretation of Chapter
	(1) In this Chapter
	associate has the meaning given by section 61I,
	business means any trade, profession or vocation,
	the client has the meaning given by section 61D(4),
	employer's national insurance contributions means secondary Class 1 or Class 1A national insurance contributions,
	managed service company has the meaning given by section 61B,
	national insurance contributions means contributions under Part 1 of SSCBA 1992 or Part 1 of SSCB(NI)A 1992,
	PAYE provisions means the provisions of Part 11 or PAYE regulations,
	the relevant services has the meaning given by section 61D(4), and
	the worker has the meaning given by section 61D(4).
	(2) Nothing in section 995 of ITA 2007 (meaning of control) applies for the purposes of this Chapter.
	(5) In section 218(1) (exclusion of lower-paid employments from parts of benefits code: calculation of earnings rate), in Step 1, at the end of paragraph (d) insert
	and
	(e) in the case of an employment within section 61G(2) (deemed employment payment by managed service company), the total amount of deemed employment payments for the year.
	(6) The amendments made by this Resolution come into force on 6th April 2007.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	 The House divided: Ayes 293, Noes 234.

Question accordingly agreed to.
	22. Managed service companies (other provision)
	 Resolved,
	That further provision may be made in connection with managed service companies.
	23. Restrictions on trade loss relief for partners
	 Resolved,
	That provision (including provision having retrospective effect) may be made restricting reliefs for losses made by individuals carrying on trades in partnership.
	24. Chargeable gains
	 Resolved,
	That provision (including provision having retrospective effect) may be made amending, or making amendments connected with, the Taxation of Chargeable Gains Act 1992.
	25. Life policies etc (effect of rebated or reinvested commission)
	 Resolved,
	That provision may be made amending
	(a) Chapter 2 of Part 13 of the Income and Corporation Taxes Act 1988, and
	(b) Chapter 9 of Part 4 of the Income Tax (Trading and Other Income) Act 2005.
	26. Avoidance involving financial arrangements
	 Resolved,
	That provision (including provision having retrospective effect) may be made in relation to
	(a) section 347A of the Income and Corporation Taxes Act 1988 (annual payments),
	(b) section 660C of that Act (income of settlor),
	(c) sections 774A to 774G of that Act (structured finance arrangements),
	(d) Schedule 23A to that Act (manufactured payments),
	(e) Chapter 2 of Part 4 of the Finance Act 1996 (loan relationships),
	(f) section 228F of the Capital Allowances Act 2001 (lease and finance leaseback), and
	(g) Schedule 26 to the Finance Act 2002 (derivative contracts).
	27. Companies carrying on business of leasing plant or machinery
	 Resolved,
	That provision (including provision having retrospective effect) may be made in relation to
	(a) section 343 of the Income and Corporation Taxes Act 1988, and
	(b) Schedule 10 to the Finance Act 2006.
	28. Lloyd's corporate members
	 Resolved,
	That provision may be made in relation to corporate members of Lloyd's.
	29. Employee benefit contributions
	 Resolved,
	That provision may be made in relation to employee benefit contributions.
	30. Schemes etc designed to increase double taxation relief
	 Resolved,
	That provision (including provision having retrospective effect) may be made amending and extending the effect of sections 804ZA to 804ZC of, and Schedule 28AB to, the Income and Corporation Taxes Act 1988.
	31. Industrial and agricultural buildings allowances
	 Resolved,
	That provision may be made for the purposes of the Capital Allowances Act 2001 in relation to industrial buildings allowances and agricultural buildings allowances.
	32. Insurance companies
	 Resolved,
	That provision (including provision having retrospective effect) may be made about insurance companies, including companies which have ceased to be insurance companies after a transfer of business.
	33. Technical provisions made by general insurers
	 Resolved,
	That provision may be made in relation to technical provisions made by general insurers.
	34. Friendly societies
	 Resolved,
	That provision may be made amending section 464 of the Income and Corporation Taxes Act 1988.
	35. Sale and repurchase of securities
	 Resolved,
	That provision may be made in relation to arrangements for the sale and repurchase of securities.
	36. Controlled foreign companies
	 Resolved,
	That provision (including provision having retrospective effect) may be made in relation to controlled foreign companies.
	37. Expenditure on research and development
	 Resolved,
	That provision may be made about tax relief for expenditure on research and development.
	38. Venture capital schemes
	 Resolved,
	That provision may be made about the corporate venturing scheme, the enterprise investment scheme and venture capital trusts.
	39. Loss relief on disposal of shares
	 Resolved,
	That provision may be made about loss relief on disposal of shares.
	40. Real Estate Investment Trusts
	 Resolved,
	That provision (including provision having retrospective effect) may be made amending Part 4 of the Finance Act 2006.
	41. Alternative finance
	 Resolved,
	That amendments may be made of and in relation to Chapter 5 of Part 2 of the Finance Act 2005.
	42. Trust gains on contracts for life insurance
	 Resolved,
	That provision may be made amending section 498 of the Income Tax Act 2007.
	43. Offshore funds
	 Resolved,
	That provision (including provision having retrospective effect) may be made in relation to offshore funds and investors in them.
	44. Securitisation companies
	 Resolved,
	That provision may be made amending sections 83 and 84 of the Finance Act 2005.
	45. Enterprise management incentives
	 Resolved,
	That provision may be made amending Schedule 5 to the Income Tax (Earnings and Pensions) Act 2003.
	46. Unpaid remuneration and employee benefit contributions
	 Resolved,
	That provision may be made amending sections 31 and 274 of the Income Tax (Trading and Other Income) Act 2005.
	47. Abolition of contributions relief for life assurance premium contributions
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 51(3) (Ways and means motions),
	That
	(1) Part 4 of the Finance Act 2004 (pension schemes etc) is amended as follows.
	(2) In section 188(3) (relief for members' contributions: contributions which are not relievable pension contributions), after paragraph (a) insert
	(aa) any contributions which are life assurance premium contributions (see section 195 A),.
	(3 After section 195 insert
	195A Life assurance premium contributions
	(1) Contributions paid by or on behalf of an individual under a registered pension scheme are life assurance premium contributions for the purposes of section 188(3)(aa) if
	(a) rights under a non-group life policy (see subsection (2)) are (or later become) held for the purposes of the pension scheme, and
	(b) the contributions are treated by this section as paid in respect of premiums under the non-group life policy (see subsections (3) to (5)).
	(2) For the purposes of this section a non-group life policy is a policy of insurance under which the only benefits which may become payable are benefits payable in consequence, or in anticipation, of
	(a) the death of the individual or one of a group of individuals which includes the individual, or
	(b) the deaths of more than one of a group of individuals
	(i) which includes the individual, and
	(ii) the other members of which are connected with the individual.
	(3) Contributions paid by or on behalf of the individual under the pension scheme are treated as paid in respect of premiums under the non-group life policy if
	(a) the payment of the contributions constitutes the payment of premiums under the policy, or
	(b) the person by whom the contributions are paid intends the contributions (or an amount equivalent to them) to be applied towards paying premiums under the policy.
	(4) Where the amount of the premiums under the policy in a tax year exceeds the amount of any contributions treated as paid in respect of the premiums by subsection (3), other contributions paid by or on behalf of the individual under the pension scheme in the tax year are treated as paid in respect of premiums under the policy to the extent that their amount does not exceed the difference between the amount of the premiums and the amount of any contributions treated as paid in respect of the premiums by subsection (3).
	(5) But where
	(a) the benefits under the policy relate to the death of one or more of a group of individuals, and
	(b) contributions are also paid under the pension scheme in the tax year by or on behalf of another member or other members of the group, the amount of the contributions paid by or on behalf of the individual which are treated as paid in respect of premiums under the policy by subsection (4) does not exceed what is just and reasonable having regard to the operation of section 188(3)(aa) in relation to the contributions paid by or on behalf of another member or other members of the group.
	(6) For the purposes of this section an individual (A) is connected with another individual (B) if
	(a) A is B's spouse or civil partner,
	(b) A is a relative of B,
	(c) A is the spouse or civil partner of a relative of B,
	(d) A is a relative of B's spouse or civil partner, or
	(e) A is the spouse or civil partner of a relative of B's spouse or civil partner;
	and for the purposes of this subsection relative means brother, sister, ancestor or lineal descendant.
	(4) The amendments made by this Resolution have effect in relation to contributions under any pension scheme that is not an occupational pension scheme which are paid on or after 6th April 2007.
	(5) But they do not have effect in relation to contributions paid at any time if the contributions are treated as paid in respect of premiums under a policy of insurance which at that time is a protected policy (see paragraphs (6) to (10)).
	(6) A policy of insurance within paragraph (7) or (8) is a protected policy but only until a relevant event occurs (see paragraphs (9) and (10)).
	(7) A policy of insurance is within this paragraph if
	(a) it is issued in respect of insurances made before 6th December 2006,
	(b) the pension scheme became a registered pension scheme before that date, and
	(c) rights under the policy became held for the purposes of the pension scheme before that date.
	(8) A policy of insurance is within this paragraph if
	(a) it is issued in respect of insurances made before 6th April 2007,
	(b) the pension scheme became a registered pension scheme before that date,
	(c) rights under the policy became held for the purposes of the pension scheme before that date,
	(d) the policy was issued in pursuance of a proposal made in writing (by whatever means) and received by or on behalf of the insurer on or before 13th December 2006,
	(e) the amount of the benefits payable under the policy (at the latest of the time when the insurances were made, the pension scheme was registered or rights under the policy became held for the purposes of the pension scheme) is no more than the amount applied for in the proposal,
	(f) the period for which benefits are so payable (at the latest of those times) is no longer than the period specified in the proposal, and
	(g) the policy is not a protected policy by virtue of paragraph (7).
	(9) For the purposes of paragraph (6) a relevant event occurs if, after the relevant time, the terms of the policy are varied so as to
	(a) increase the benefits payable under the policy, or
	(b) extend the period during which benefits are so payable.
	(10) 'The relevant time
	(a) in the case of a policy of insurance within paragraph (7) which is issued in respect of insurances made before 6th April 2006, is 20th March 2007,
	(b) in the case of any other policy of insurance within paragraph (7), is 5th December 2006, and
	(c) in the case of a policy of insurance within paragraph (8), is the time when it became a protected policy.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	 The House divided: Ayes 292, Noes 232.

Question accordingly agreed to.
	48. Persons by whom registered pension schemes may be established
	 Resolved,
	That
	(1) Section 154 of the Finance Act 2004 (persons by whom registered pension scheme may be established) is amended as follows.
	(2) For subsection (1) substitute
	(1) An application to register a pension scheme may be made only if the pension scheme is an occupational pension scheme or has been established by a person with permission under FISMA 2000 to establish in the United Kingdom a personal pension scheme or a stakeholder pension scheme.
	(3) After subsection (2) insert
	(2A) Subsection (1) is to be construed in accordance with section 22 of FISMA 2000, any relevant order under that section and Schedule 2 to that Act.
	(4) Omit subsection (3).
	(5) In subsection (4), omit ktand section 155.
	(6) Omit section 155 of that Act (persons by whom scheme may be established: supplementary).
	(7) In section 273 of that Act (members liable as scheme administrator)
	(a) in subsection (5)(a), omit was established by a person or body specified in section 154(l)(a) to (g) (insurance companies etc) and, and
	(b) in subsection (7), omit was established by a person or body specified in section 154(l)(a) to (g) and.
	(8) The amendments made by this Resolution come into force on 6th April 2007.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	49. Pension schemes etc
	 Resolved,
	That further provision (including provision having retrospective effect) may be made in relation to pension schemes and employer-financed retirement benefits schemes.
	50. Stamp duty land tax, stamp duty and stamp duty reserve tax
	 Resolved,
	That provision may be made about stamp duty land tax, stamp duty and stamp duty reserve tax.
	51. Stamp duty land tax (exempt interests)
	 Resolved,
	That
	(1) The Finance Act 2003 is amended as follows.
	(2) After section 73A insert
	73B Exempt interests
	(1) An interest held by a financial institution as a result of the first transaction within the meaning of section 71A(l)(a), 72(1) (a) or 72A(l)(a) is an exempt interest for the purposes of stamp duty land tax.
	(2) That interest ceases to be an exempt interest if
	(a) the lease or agreement mentioned in section 71A(l)(c), 72(1) (b) or 72A(l)(b) ceases to have effect, or
	(b) the right under section 71A(l)(d), 72(1 )(c) or 72A(l)(c) ceases to have effect or becomes subject to a restriction.
	(3) Subsection (1) does not apply if the first transaction is exempt from charge by virtue of Schedule 7.
	(4) Subsection (1) does not make an interest exempt in respect of
	(a) the first transaction itself, or
	(b) a further transaction or third transaction within the meaning of section 71 A(4), 72(4) or 72A(4).
	(3) After section 48(3) insert
	(3A) Section 73B makes additional provision about exempt interests in relation to alternative finance arrangements.
	(4) For the text of sections 71A(8), 72(7), 72A(8) and 73(5)(a) substitute In this section financial institution has the meaning given by section 46 of the Finance Act 2005 (alternative finance arrangements).
	(5) This Resolution
	(a) has effect in relation to anything that would, but for the exemption provided by new section 73B inserted by paragraph (2), be a land transaction with an effective date on or after 22nd March 2007, and
	(b) applies, in accordance with sub-paragraph (a), to interests irrespective of the date of their creation.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	52. Value added tax (joint and several liability)
	 Resolved,
	That provision may be made amending section 77A of the Value Added Tax Act 1994.
	53. Value added tax (deemed supplies in case of certain surrenders)
	 Resolved,
	That
	(1) In paragraph 9 of Schedule 4 to the Value Added Tax Act 1994 (matters to be treated as supply of goods or services: application of paragraphs 5 to 8 where land forms part of assets of business etc), there is inserted at the end
	 (4) In this paragraph grant includes surrender.
	(2) The amendment made by this Resolution has effect in relation to surrenders on or after 21st March 2007.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	54. Value added tax (valuation of deemed supplies)
	 Resolved,
	That provision may be made amending paragraph 7 of Schedule 6 to the Value Added Tax Act 1994.
	55. Value added tax (transfers of going concerns)
	 Resolved,
	That provision may be made amending the Value Added Tax Act 1994 in relation to transfers of businesses, or parts of businesses, as going concerns.
	56. Insurance premium tax (meaning of premium)
	 Resolved,
	That
	(1) In section 72 of the Finance Act 1994 (interpretation: premium), after subsection (1A) there is inserted
	(IB) Where
	(a) an amount is charged (to the insured or any other person) in respect of the acquisition of a right (whether of the insured or any other person) to require the insurer to provide, or offer to provide, any of the cover included in a taxable insurance contract, and
	(b) any payment in respect of that amount is not regarded as a payment received under that contract by the insurer by virtue of subsection (1A) above,
	the payment is to be regarded as a payment received under that contract by the insurer unless it is chargeable to tax at the higher rate by virtue of section 52A above.
	(2) This Resolution has effect in relation to amounts charged on or after 22nd March 2007.
	And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
	57. Petroleum revenue tax
	 Resolved,
	That provision may be made amending enactments relating to petroleum revenue tax.
	58. Amendments connected with the Gambling Act 2005
	 Resolved,
	That provision may be made in consequence of, or otherwise in connection with, the Gambling Act 2005.
	59. Vehicle excise duty (exempt vehicles)
	 Resolved,
	That provision may be made for amending Schedule 2 to the Vehicle Excise and Registration Act 1994.
	60. Limitation period in old actions for mistake of law relating to direct tax
	 Resolved,
	That provision may be made disaflplying section 32(1 )(c) of the Limitation Act 1980 in relation to actions brought biefore 8th September 2003 for relief from the consequences of a mistake of law relating to a taxation matter under the care and management of the Commissioners of Inland Revenue.
	61. Stock exchanges
	 Resolved,
	That provision may be made in relation to stock exchanges.
	62. Mergers Directive
	 Resolved,
	That provision (including provision having retrospective effect) may be made for the purposes of complying with Council Directive No. 90/434/EEC (mergers and transfers).
	63. Excise duties (small consignment relief)
	 Resolved,
	That provision may be made revoking the Excise Duties (Small Non-Commercial Consignments) Relief Regulations 1986.
	64. Relief from tax (incidental and consequential charges)
	 Resolved,
	That it is expedient to authorise any incidental or consequential charges to any duty or tax (including charges having retrospective effect) that may arise from provisions designed in general to afford relief from taxation.

PROCEDURE (FUTURE TAXATION)

Resolved,
	That, notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills, any Finance Bill of the present Session may contain the following provisions taking effect in a future year
	(a) provision for corporation tax to be charged for the financial year 2008;
	(b) provision for substituting the Table in Schedule 1 to the Inheritance Tax Act 1984 in relation to chargeable transfers made on or after 6th April 2010;
	(c) provision about the rates of climate change levy;
	(d) provision about the rate of aggregates levy;
	(e) provision about the rates of landfill tax;
	(f) provision amending section 312 of the Income Tax (Trading and Other Income) Act 2005.
	Bill ordered to be brought in upon the foregoing resolutions: And that the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. Secretary Prescott, Mr. Secretary Darling, Secretary John Reid, Ms Secretary Hewitt, Secretary David Miliband, Secretary Alan Johnson, Mr. Stephen Timms, John Healey, Ed Balls and Dawn Primarolo do prepare and bring it in.

Finance Bill

Dawn Primarolo accordingly presented a Bill to grant certain duties, to alter other duties, to amend the law relating to the national debt and the public revenue, and to make further provision in connection with finance: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed. Explanatory notes to be printed [Bill 86].

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Social Security

That the draft Social Security (Contributions) (Re-rating and National Insurance Funds Payments) Order 2007, which was laid before this House on 24th January, be approved.
	That the draft Social Security, Occupational Pension Schemes and Statutory Payments (Consequential Provisions) Regulations 2007, which were laid before this House on 19th February, be approved.
	That the draft Social Security Contributions (Consequential Provisions) Regulations 2007, which were laid before this House on 6th March, be approved .[Mr. Heppell.]
	 Question agreed to.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Social Security

That the draft Social Security (Contributions) (Amendment No. 2) Regulations 2007, which were laid before this House on 21st February, be approved. [Mr. Heppell.]
	 Question agreed to.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Social Security

That the draft Child Benefit Up-rating Order 2007, which was laid before this House on 30th January, be approved.
	That the draft Guardian's Allowance Up-rating Order 2007, which was laid before this House on 30th January, be approved. [Mr. Heppell.]
	 Question agreed to.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Social Security (northern Ireland)

That the draft Guardian's Allowance Up-rating (Northern Ireland) Order 2007, which was laid before this House on 30th January, be approved. [Mr. Heppell.]
	 Question agreed to.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Corporation Tax

That the draft Corporation Tax (Taxation of Films) (Transitional Provisions) Regulations 2007, which were laid before this House on 27th February, be approved. [Mr. Heppell.]
	 Question agreed to.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Constitutional Law

That the draft Police, Public Order and Criminal Justice (Scotland) Act 2006 (Consequential Provisions and Modifications) Order 2007, which was laid before this House on 30th January, be approved.
	That the draft Tourist Boards (Scotland) Act 2006 (Consequential Modifications) Order 2007, which was laid before this House on 30th January, be approved. [Mr. Heppell.]
	 Question agreed to.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Electricity

That the draft Renewables Obligation Order 2006 (Amendment) Order 2007, which was laid before this House on 8th February, be approved. [Mr. Heppell.]
	 Question agreed to.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Companies

That the draft Companies Act 2006 (Commencement No. 2, Consequential Amendments, Transitional Provisions and Savings) Order 2007, which was laid before this House on 8th February, be approved. [Mr. Heppell]
	 Question agreed to.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Sea Fisheries

That the Decommissioning of Fishing Vessels Scheme 2007 (S.I., 2007, No. 312), dated 6th February 2007, a copy of which was laid before this House on 8th February, be approved. [Mr. Heppell.]
	 Question agreed to.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Animals

That the draft Docking of Working Dogs' Tails (England) Regulations 2007, which were laid before this House on 8th February, be approved.
	That the draft Mutilations (Permitted Procedures) (England) Regulations 2007, which were laid before this House on 8th February, be approved.
	That the draft Welfare of Animals (Miscellaneous Revocations) (England) Regulations 2007, which were laid before this House on 8th February, be approved. [Mr. Heppell]
	 Question agreed to.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Betting, Gaming and Lotteries

That the draft Gambling Act 2005 (Exclusion of Children from Track Areas) Order 2007, which was laid before this House on 21st February, be approved.
	That the draft Gambling Act 2005 (Mandatory and Default Conditions) (England and Wales) Regulations 2007, which were laid before this House on 26th February, be approved. [Mr. Heppell.]
	 Question agreed to.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Immigration

That the draft Integration Loans for Refugees and Others Regulations 2007, which were laid before this House on 21st February, be approved. [Mr. Heppell.]

Mr. Deputy Speaker: I think the Ayes have it.

Hon. Members: No.
	 Division deferred till Wednesday 28 March, pursuant to Standing Order No. 41A (Deferred divisions).
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Immigration and Nationality

That the draft Immigration and Nationality (Fees) Regulations 2007, which were laid before this House on 15th March, be approved. [Mr. Heppell.]

Mr. Deputy Speaker: I think the Ayes have it.

Hon. Members: No.
	 Division deferred till Wednesday 28 March, pursuant to Standing Order No. 41A (Deferred divisions).
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Northern Ireland

That the draft Northern Ireland Act 2000 (Modification) Order 2007, which was laid before this House on 20th February, be approved. [Mr. Heppell.]
	 Question agreed to.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Social Security

That the draft Jobseeker's Allowance (Jobseeker Mandatory Activity) Pilot Regulations 2007, which were laid before this House on 26th February, be approved. [Mr. Heppell.]
	 Question agreed to.

EUROPEAN UNION DOCUMENTS

Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

Maritime Policy

That this House takes note of European Union Document No. 11510/06 and Addenda 1 to 13, Commission Communication: Green Paper-Towards a future maritime policy for the Union: A European Vision for the oceans and seas; and endorses the Government's approach to discussions on these documents. [Mr. Heppell.]
	 Question agreed to.

PETITIONS

Sub-Post Offices

David Maclean: I am pleased to present a petition containing almost 12,000 signatures from petitioners in Penrith and The Border and Carlisle constituencies, who demand that the Government abandon their plans to cut 2,500 post offices, especially those scheduled for closure in Cumbria. More than 8,000 signatures are from Penrith and The Border constituents, and have been collected in almost 100 post offices the length and breadth of the largest constituency in England and Wales. My colleague John Stephenson, the Conservative candidate for Carlisle, has collected 3,500 signatures from sub-post offices in the Carlisle constituency. Collectively, all those signatures indicate the strength of feeling among constituents in the northern half of Cumbria that our network of sub-post offices is vital, and that we do not want to lose any of them.
	The petition states:
	To the House of Commons,
	The Petition of supporters of post offices in Penrith and The Border constituency,
	Declares that Sub Post offices are a vital part of the social fabric of the local community and must be preserved. Notes that the present Post Office network in England and Wales cost 150 million per annum to maintain but that in the last year alone the Government has taken away 168 million of Government services which should continue to be done by Post Offices. Believes that mobile Post Offices cannot be a substitute for the village shop/Post Office which is often the hub of social and community life, the centre of informal networking which binds a village together. The Petitioners therefore request that the House of Commons reject Government plans to cut 2,500 Post Offices and call on them to expand the Sub Post Office network.
	And the Petitioners remain, etc.
	 To lie upon the Table.

Inland Waterways

Andrew Selous: I wish to present a petition relating to the Grand Union canal, which runs through Linslade and the town of Leighton Buzzard in my constituency. It has been signed by many of my constituents and others who currently enjoy the canal network in that part of the country.
	The petition states:
	To the House of Commons,
	The Petition of the constituents of South West Bedfordshire and other users of Britain's inland waterways,
	Declares that our inland waterways are a unique national asset that provide an important contribution to the quality of life for millions of our citizens. We therefore are deeply concerned that the Department for Environment, Food and Rural Affairs has seen fit to reduce British Waterways' grant by some 60 million over the next 5 years and that of the Environment Agency by 25 million in this financial year. We believe that these cuts will have a devastating effect on the well-being of inland waterways.
	The Petitioners therefore request that the House of Commons call upon the Government to introduce legislation to solve the immediate problems caused by these cuts to current budgets and to ensure that long-term funding is guaranteed to enable continued investment and restoration of the waterways.
	 To lie upon the Table.

Mini Motorbikes

Andrew Selous: I wish to present a petition mainly from the residents of the town of Dunstable and the nearby village of Totternhoe, concerning the problems caused by mini motorbikes to my constituents in those areas.
	The petition states:
	To the House of Commons.
	The Petition of the residents of Dunstable and others,
	Declares that mini-motorbikes and unregistered off-road motorbikes are causing distress and upset in Hillcroft, Brewers Hill and on many of the surrounding roads, pavements and alleyways in Dunstable as well as on the Green Lanes and farmland between Totternhoe and Dunstable. The motorbikes are causing damage to the land and the actions of the riders are intimidating both humans and wildlife. This problem is ongoing 24 hours a day, 7 days a week and is being committed by both youths and adults alike. Further declares that this is not just a local problem, but is a problem that is occurring nationally.
	The Petitioners therefore request that the House of Commons urges the government to introduce legislation to restrict the use of mini-motorbikes and unregistered off-road bikes in uncontrolled areas.
	 To lie upon the Table.

ROAD TRAFFIC DEBTS

Motion made, and Question proposed, That this House do now adjourn .[Mr. Heppe l l.]

Austin Mitchell: I am very lucky to be speaking to the House at this witching hour. However, the Table Office has somewhat marred the beauty, simplicity and elegance of my title, which was The Enforcement of Road Traffic Fines by Bailiffs. I want to raise that issue because it is producing a huge extortion racket, with local authoritieswhich should protect the peoplecolluding with cheating bailiffs to impose huge and excessive charges that are then justified by lies and enforced by bullying. Those charges are imposed on motorists who have unpaid fines, many of whom do not even know that they have offended. That is the group I wish to talk about in particular. I am talking about the innocent, not the Nigerian embassy or the American embassy, or habitual offenders who do not seem to get caught. This is an extortion racket against the innocent.
	I want to give an example involving my daughter, Susan Mitchell. She lives in Dulwichall my kids are middle-class and have moved up in the world faster than I have. She arrived home from work on 5 March this year and set off to take the kids to their swimming class only to find that her car had been clamped by an enforcement firm called JBW. It was demanding 706.22, plus 1 if she paid by credit card707.22to release it. It said that if that was not paid it would tow the car off and sell it.
	This incident was related to an unpaid parking charge from 8 September last year. My daughter says that a ticket was not stuck on the car, and given that she was moving house at the time to a house two streets away, it seems clear that any reminder to pay and any notice of the court order had gone to the old house. We have this obstinate British habit of not sending court orders, reminders to pay and other such documents by recorded delivery. Every other European country requires proof of delivery; we do not, but we should.
	The local authority, Southwark council, had been notified of my daughter's move. It had the change of address, but it did not bother to check its records; it simply handed the case to the bailiffs. The attitude was, Here's a nice contract for JBW. Let's give them a nice little earner. JBW, the enforcement agency, claims to have checked with the Driver and Vehicle Licensing Agencyindeed, it charged my daughter 5.32 for that checkwhich had been notified of the change of address, so JBW knew of that change. Nevertheless, it claims to have made three visits to the old address, for which it charged my daughter 152. Incidentally, the new residents at the old address did not notice those visits, so they cannot have been door-knocking visits.
	JBW also claims to have written to the old address warning of distraint action, as it is required to do. Again, it did not send that letter by recorded delivery. It explained to my daughter that it is too expensive to send these things out by recorded delivery. It gets only a statutory allowance for writing one letter11.20. Recorded delivery costs 68p and a first-class stamp 32pa total of 1. So it prefers the certainties of second-class mail for the delivery of these documents, to the wrong address. It did not waste any more stamps writing to the new address, when it found it. In fact, it did not write to it at all; it simply snuck round and clamped the car.
	This is the fundamental problem. Bailiffs do not want people to pay up on a first approach, which my daughter would have done once the situation had been explained to her. There is no money for the bailiffs if the person coughs up. They get fees only if they visit the house, so we get these phantom claims for calls that were never in fact made. The streets of London are presumably filled with ghostly visitors flitting from house to house, unnoticed by the householders. They get money only if they distrain or clamp the vehicle, because that entitles them to charges, which they set.
	JBW clamped my daughter's car and charged her 240 for doing so, which is double the rate that it says it charges for that service. That made a total of 707, of which 155 went to Southwark. Jamie Waller, the boss of JBW, says in an affidavit that he varies charges by area, so presumably the posh areas get the higher charges and the less well-off ones get the lower charges. My daughter must therefore live in a middling-posh area.
	Eventually, once my daughter had paid, JBW came to remove the clampat 6 o'clock in the morning the next day. Anybody in that situation would be as distressed as my daughter was. What do they do? Who do they turn to? Naturally, she rang Southwark council for help. It told her that the charge was not unreasonable. A charge of 707 seems to me absolutely monstrous, but to Southwark council it is not unreasonable. It must pay its staff very well indeed if they can afford to pay such charges out of their own pockets. The council is very courageous in committing itself to the phrase not unreasonable.
	Southwark council also told my daughter that this was none of its businessit was between her and JBW. That is not true, because the council has a duty of care toward its residents; however, it also has a contract with JBW. However dodgy JBW might be, Southwark has a contract with it to perform this service. That makes it liable for the acts of its agents, because JBW is acting as the agent of the council. Instead of giving that useless and untrue information, the council could have told my daughter that she could have made a statutory declaration in the county court, which would have cost her 5. That would have gone to the Northampton parking fines centre, stayed the process and the clamp could have been removed. However, Southwark council was spectacularly useless and did not give my daughter that information. It did not do so because it is in collusion on this issue with JBW, because it has a contract with JBW for the charges. People are left defenceless and bullied by the bailiffs into coughing up. My daughter coughed up 707.22.
	I was appalled by that enormous and ridiculous charge, so I began to investigate with the help of the London motorists action group. Sheila Harding, Philip Evans, Alison Laughton and others were all very helpful and very angry. Through those investigations, I have built up a picture of what is a huge extortion racket operated by a 6 billion industry, primarily in London but all over the country. They are private contractors on contract to public bodies.
	The industry is cutting corners, lying and pretending that it has done things that it has not, because the fee structure does not pay it for simply getting the money, which is what the local authority presumably wants. That is not the real job of bailiffs. Their real job is to distrain goods. That is their traditional role and they only get any fees if they distrain goodsor clamp cars. So they fabricate charges, claim for phantom visits and use uncertified staff. In fact, Sheila Harding keeps a record of 103 inquiries about acts that should have been done by certified bailiffs, but when checked only 47 had been. I do not know whether Mr. Marsh, who clamped my daughter's car, is certified. Southwark council does not seem to know and the firm is not saying. He may be certified or he may not be. All I know is that I do not like his tone or aggressive attitude in a recording of his interview with my daughter.
	Sheila Harding's research also shows that there are only 1,521 certified bailiffs in the country. Those 1,521 certified bailiffs are dealing, on 2006 figures, with 4 million liability orders for unpaid council tax, 900,000 unpaid parking charges in London and 1.6 million people in arrears with child support. They cannot do that, so they are using uncertified staff. Sheila Harding's research shows that the local authority contracts, which should be open and used to regulate the bailiffs, are useless. Some of them are secret and people have had to apply under freedom of information legislation to find out about them, none of them is published, and many of them have lapsed. One contract, Hammersmith's, was lost and all of them are weak. The result is that the extortion racket is unchecked.
	I shall give some examples. Equita, which is a subsidiary of CrapitaI am sorry, I mean Capitais the biggest firm in the business. Alex Henney was clamped by Equita and he took the case to the local ombudsman and proved that Equita and Camden had both lied about the visits madephantom armies making phantom visits. Simon Aldridge was charged 704. He took Equita to court and the judge accepted that the visits had been claimed for but not made. Duncan McGowan was charged 2,084 and he got 1,426 back through the small claims court. I have many more examplesthese are just a sample. In one case, a man had a letter dropped through his letterbox saying that a certified bailiff had visited him. He dashed out and followed the man who had delivered the letter. That man was delivering a sheaf of similar letters, and he turned out not to be a certified bailiff but just a messenger. In 2004, Equita's pre-tax profits amounted to 7.4 million, against capital employed of 5.8 milliona return on capital of 127 per cent. The company does not make that much from 10 letters and regulated fees.
	Bailiff certification is a licence to filch money from people over unpaid charges. That was exposed by the BBC's Whistleblower programme last September. Given what I have learned through my daughter's experience and my research, the question that I want to ask is, What should we do about it? The problem is that private bailiffs are working on public authority contracts, so my first suggestion is that local authorities must exert tighter control over contractors. The Transport Committee recommended that in 2005. It wanted careful regulation by the local authority to ensure that charges, operations and practices were all transparent. That should be put in place: when they hand out a contract, local authorities should exercise their powers to ensure that it is not a nice little earner, but a duty to be fulfilled.
	Secondly, the fees need to be regulated. The present structure is based on the old-fashioned view that bailiffs distrain goods, but it should recognise that nowadays they are about getting the money to pay charges. We need a structure that places the emphasis on getting the fines paid, not on grabbing goodssomething that bailiffs want to do because that gives them access to bigger fees. Some industry leaders are trying to develop a more transparent fee scale. Good on themI hope that they are successful and that the Government encourage them.
	Finally, we need a regulator. Cowboys need a sheriff, and the mafia cannot be regulated by the mafia. Crooksand I use that word in the Australian sense, to describe people who are crookneed a rule-maker to control them. The Government have proposed that the Security Industry Authority should be the regulator, but I do not think that it is up to the job. The SIA is a licensing authority, not a regulator, and bailiffs are not part of the security industry. We need a proactive regulator who can investigate complaints.
	The Government began a consultation process in January but, unfortunately, they have set their face against giving the regulator the ability to investigate complaints. It is essential that someone protect people who suffer the sort of problems that I have described. It is daft to exclude investigation from the regulator's role. The regulator should disqualify, discipline, regulate fees, hear appeals, and be available to help people faced with the sort of bullying that my daughter experienced.
	I must warn my hon. and learned Friend the Minister that the best that her consultation paper proposes is not good enough, and that it is a shame to see the Government back-tracking. In the 2001 Green Paper, they suggested a dedicated regulator, and that was a good idea. However, they had pulled back a little by 2003, and the Tribunals, Courts and Enforcement Bill still has not got the matter right.
	It is a rare pleasure to be here at 1.18 in the morning and chatting up my hon. and learned Friend. I am enjoying the experience, and I am delighted that she is replying to the debate, as I know that she has a concern for justice and fairness. I hope that she will be bold and make sure that the Tribunals, Courts and Enforcement Bill gets this matter right.
	We need a regulator who can beat the bastards, bash the bullies, control the crooks, comfort the complaining and ease the pains of the people. Unless we get that, the sort of extortion racket that I have described will continue. I hope that my hon. and learned Friend will give us a regulator who can deal with these people.

Vera Baird: First, may I congratulate my hon. Friend the Member for Great Grimsby (Mr. Mitchell) on securing parliamentary time for this important and timely debate? The Department for Transport is responsible for policy and the statutory framework for the enforcement of some road traffic regulations, including parking penalties and debts resulting from them. My Department is responsible for the bailiff certification process. Section 78 of the Road Traffic Act 1991 allows the Lord Chancellor to make orders for road traffic debts to be enforced by certificated bailiffs. It should be those certificated bailiffs, working for local authorities, who deal with the enforcement of road traffic debts. My hon. Friend referred to the Tribunals, Courts and Enforcement Bill, which finished its Committee stage in the House of Commons today. It includes important changes to enforcement agent law, which I hope he will find more convincing than he expects. Enforcement agent law is mixed up in myriad legislative fragments and in the common law. The role of bailiffs has evolved piecemeal over centuries. There is a need for the law to be clear, as well as a need to regulate the individuals and businesses responsible for the activities. What we are doing is to legislate and to regulate.
	The Bill consolidates enforcement agent law and puts it all in one place, which is going to make it a lot easier for enforcement agents, creditors, the advice sector and debtors to understand it. Those provisions will apply to the enforcement of road traffic debts. Schedule 12 sets out a new procedure that must be followed when enforcing debts by taking goods. It is a framework, and further detail will be provided in the regulations to follow. A detailed policy statement has been laid before the House that sets out what we intend to include in regulations. In paragraph 160 of that statement, we set out what the enforcement agent will need to provide to the debtor when entering the premises. That information will include charges which have been made, information on any further charges that could be made in relation to the debt, and an outline of avenues of complaint and rights of appeal, including how to appeal against excessive fees.
	There are different fees depending on the type of debt. The Bill provides for one fee structure and puts all fees in one place, which should empower people to resist abuse. Importantly, there will be an up-front fee element, payable to bailiffs so that they do not act entirely in pursuit of a cut of the cash recoveredwe hope that that will help. It will be necessary, through the consultation on the detail, to ensure we get the level and nature of the fees right to avoid possible abuses such as grabbing goods and phantom visits of the kind discussed by my hon. Friend. As I said, there will be an appeal route and a complaint route. The Bill includes an enhanced and extended certification process, which will make a major contribution towards our goal of a fully regulated, trained and professionalised enforcement industry. No one at all save state employees can practise as an enforcement agent or bailiff unless they are certificated after that provision comes into force.
	Under the new certification process, certificates will be issued by a county court judge, as they are now, but the conditions will be much stricter. There will be a greater emphasis on training, especially in diversity awareness, conflict avoidance and dealing with the vulnerable. In my view, that is about getting all members of the bailiff industry to understand, as many of them already do, that they are working in the public interest, and are not simply debt collectors working single-mindedly in the interests of their creditors on a commission. They are agents of the public authorities, notably the courts. However it is our longer-term intention for the whole enforcement industry, other than Crown employees, to be overseen by an independent regulatory body, and we are confident that the Security Industry Authority is an appropriate body to cover such bailiffs. An affirmative order under the Private Security Industry Act 2001 will bring bailiffs within the terms of the Act. On 30 January, as my hon. Friend said, a joint consultation paper was issued by the Department for Constitutional Affairs and the Home Office on the regulation of enforcement agents. The SIA contributed to that consultation, and we indicated that it is our preferred option. The consultation will end in about a month, and an announcement will be made in the summer.
	The SIA's regulatory structures are strong. Since it has been able to regulate doormen properly, it has done a good job. It has raised standards immenselythe good-quality professionals are pleased with thatand it has got rid of many of the bandits.

Austin Mitchell: I do not think that will be strong enough. The SIA is not a regulatory body; it is a recording and registration body. Bailiffs are not part of the security industry. Abuse is rife and there will be more casesfor example, as the police issue on-the-spot finesthat press further down the social scale, where difficulties are unique. People need a body to which they can appeal; the body needs to be able to investigate and hear appeals, and the SIA cannot do that.

Vera Baird: I realise that my hon. Friend is not yet convinced that the SIA is the right body. I have already outlined step 1: nobody will be a bailiff unless they are certificated by the court, which should get rid of a large number of the bandits. As my hon. Friend says, there are not a large number of certificated bandits and many of the types of people to whom he referred are still in the business. Training will be part and parcel of the job of the SIA. I would have thought that my hon. Friend's constituency experience was similar to mine, in that the quality of doormen has infinitely improved since the SIA had a proper role in regulating them. Although there is a difference between a bailiff and a doorman, it seems to us that the SIA is the right body to take the regulatory role.
	The SIA has regulatory structures; it will have the right tools to encourage compliance and will work first to achieve it rather than using enforcement. However, it will set the competences required for individuals and accredit training, and ensure that all enforcement agents have achieved levels of competency. It will also licence the managers and supervisors of front-line operatives and provide a voluntary approved contractor scheme for business.
	The SIA's enforcement policy code sets out in detail that it will use oral and written warnings first if it finds that companies or individuals fail to comply, but there are also penalties in the Private Security Industry Act 2001a fine of up to 5,000 maximum or six months' imprisonment for various offences. In addition, we will be looking at the possibility of using alternative dispute resolution for complaints. There will thus be an interim system of enhanced certification with the emphasis on training, but there will be full-scale regulation soon. I urge my hon. Friend to respond to the consultation with some of the stories he has told us tonight.
	On the actuality of the enforcement of road traffic debts, there is a set procedure which the Government believe gives motorists adequate opportunities to demonstrate that a penalty charge notice has been incorrectly issued. It is also intended to give them ample opportunity to pay. It is only when a motorist disregards the unpaid and unchallenged penalty charge notice that it becomes a debt and the matter will be sent to a bailiff. Only then will the motorist have a bailiff at their door. It is the motorist's responsibility to settle their debts and avoid enforcement.
	The parking operational guidance from the Department for Transport to local authorities is being redrafted and will be sent out for consultation later this year. We will take the opportunity then to enhance the existing guidance to local authorities on their contracts with bailiffs, so we will approach the matter from that angle, too.
	Although my hon. Friend is clearly unhappy with the current position I hope he can see three things: first, that the Government are apprised of the problem; secondly, that we are legislating for simplification and certainty of bailiff powers, so that everyone will know what they arethe information will be promoted through leaflets and websites; and thirdly, that we are intent on regulating strictly and strongly the bailiff industry, a small part of which has been responsible for the kind of depredations to which he has referred tonight.
	I am sorry that my hon. Friend has had such trouble in his family. He is right to bring it to the attention of the House and I congratulate him again on securing the debate. We intend to protect citizens against such things happening in the future.
	 Question put and agreed to.
	 Adjourned accordingly at twenty-nine minutes past One o'clock.